ecdriver711
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They did go bankrupt (reorganized) a month or to later. The union got 80% on the dollar and stockholders less then 20%. Political Payoff
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Dusty; I always thought you as a Cockadoodledoo or at least a pluck pluck but never a peep.LOL the first post you silly peeps!
What your are ignoring is how they by passed bankruptcy law on Bond holders. Bond holders had rights that are in place to help companies raise money.When a company goes bankruptcy, the debts, including bonds, get washed out. That's the point of bankruptcy. They saved the automotive industry in the United states, which I think was a big deal.
Again, the point of bankruptcy is to wash out the debt and give the company a fresh start. the right to go bankrupt is enshrined in the Constitution.
No, political payoff. The bankruptcy laws give employees a priority in a reorganization, since you can't run a company without workers. Management employees get the same priority. nf fact, management (who were responsible for putting them in the hole in the first place), usually get a bonus to stay on. Note that the union contract got voided and was renegotiated. That's the way the law has worked from at least 1980 (last time I took a class in bankruptcy law) and was substantially amended under Reagan.They did go bankrupt (reorganized) a month or to later. The union got 80% on the dollar and stockholders less then 20%. Political Payoff
Actually I know enough to say that debt gets reorganized along with the equity. Usually, the debt gets equity, and equity gets squeezed out.You don't know much about it. Bond holders are treated different . That is why the law was there.. And you are incorrect on bankruptcy the laws on that where change in a major way many years a go . look it up.