The GM bailout was government meddling in its purest sense, a form of state capitalism as in Italy during Mussolini’s day.
Instead of legal bankruptcy, the government executive department forced bondholders to step away from their contractual rights and cede them to labor unions. This could only be viewed as a political favor in the light of past and present union contributions to the political party in control of the directives involved.
At the same time, tax terms were arbitrarily re-arranged whereby GM was able to keep valuable income tax credits that would have been lost under conventional and legal bankruptcy.
No matter what GM does from here on in, the original share and bond holders were robbed in broad daylight for blatant political reasons.(See the Earl J Weinreb NewsHole® comments.)
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