Questions on GM Bankruptcy and Debt-Relief

Questions on GM Bankruptcy and Debt-Relief
Here is a look at GM's balance sheet (only the liability portion_ on Dec. 2008; Dec. 2007; Dec. 2006 that I got from .
Dec. 2008; Dec. 2007; Dec. 2006 Liabilities Current Liabilities Accounts Payable 24,827,000 64,291,000 63,370,000 Short/Current Long Term Debt 18,472,000 6,047,000 5,666,000 Other Current Liabilities 30,635,000 - -
Total Current Liabilities 73,934,000 70,338,000 69,036,000 Long Term Debt 31,603,000 38,556,000 42,505,000 Other Liabilities 69,027,000 72,502,000 78,902,000 Deferred Long Term Liability Charges 1,823,000 2,967,000 - Minority Interest 814,000 1,614,000 1,190,000 Negative Goodwill - - -
Total Liabilities 177,201,000 185,977,000 191,633,000
I realize that GM has declared bankruptcy a few months ago, and this has nullified much of their debt, BUT NOT ALL OF THEIR DEBT. My questions involve this facet just mentioned as well as questions on this balance sheet. Q1: Why isn't ALL their debts forgiven/nullified, instead of just select portions of the debt? Q2: How is it determined that some of the debts get cancelled and others are retained? Q3: Is it possible to determine the interest rates on GM debt? I did a cursory calculation, and it appears to be 18.472% for Dec. 2008, since (Short/Current Long Term Debt is equal to) $18,472,000, and this is to be divided by (Long Term Debt, which is equal to) $31,603,000 = 18.4%. I am very sure that this is a wrong calculation.
Reply to
On Aug 12, 10:41 am, "2.7182818284590..." wrote:
Could be lots of reasons. One that comes to mind is some debt is secured, like your mortgage, and some is unsecured. Secured debt won't be forgiven as it is a direct claim on an asset like a factory. In fact, if it is like a personal B they had to "reaffirm" those debts.
See above. Also some debt is senior and some subordinated. The more senior the debt the better chance of getting paid off. (also helps if your union gave help to Obama but I digress.)
It might be possible if you took total interest payments/total debt, but don't count on getting a correct number. I think you divided debt by debt and got a % of debt that was short term or something. 18.4% is way off to be sure.
Reply to
Essentially because those with who held the debt that was not forgiven werent prepared to agree to that as part of the process of bankruptcy.
Most obviously with the debt owed to the US govt as part of the financial reorganisation.
Essentially that comes down to the power of the holders of the respective debt.
The US govt clearly has the bulk of the power in that situation because its providing the debt and equity.
Nope. Because it isnt fixed interest debt.
Yes, that calculation calculates nothing useful.
Reply to
Rod Speed

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