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JLC: "You being a lawyer know the details way better than I, but here goes."

I do not practice in bankruptcy court.

"You know that in bankruptcy proceedings there is a heirarchy of creditors that get paid in full before the next level of creditors get reimbursed (if at all). Many GM bondholders (at the top of the food chain) were not reimbursed porperly. They were paid cents on the dollar instead of fully reimbursed."

Unsecured debtholders do not necessarily get paid in full, though you are correct that those down the hierarchy generally receive nothing before those before them are paid in full.

"The plan, which was worked out between the struggling company and the Obama administration, means U.S. taxpayers will end up owning 60% of the "new GM," with other stakes held by Canadian governments, bondholders and the United Auto Workers union.

Holders of $27 billion in GM (GMGMQ) bonds get stock in the reorganized company, as will a union-controlled trust fund that will take stock rather than the $20 billion in cash it had been owed to pay future retiree health care costs. Those 650,000 retirees will have their coverage reduced."

http://money.cnn.com/2009/07/06/news/companies/GM_bankruptcy...

At first glance I see nothing that corresponds to your claim.

"Bondholders with slightly more than 50 percent of G.M.’s $27.2 billion in bond debt agreed to support the plan by the deadline of 5 p.m., according to people briefed on the matter. Among the backers was a committee of large investors holding about 20 percent of G.M.’s outstanding bonds."

http://www.nytimes.com/2009/05/31/business/31gm.html

"Plus, if I understood what I read correctly, individuals can take precedent over groups (especially government entities). That didn't happen either."

That is not how I understand it, but perhaps you can elaborate.

My understanding is that debt classes vote by class, 1 vote per dollar.

See also: http://en.wikipedia.org/wiki/General_Motors_Chapter_11_reorg...

Regards, JAFO
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