Small GM Bondholder Resigns From Negotiating Committee
27 Mai 2009 - 12:37AM
Dow Jones News
The only person representing individual General Motors Corp.
(GM) bondholders on a committee negotiating a debt exchange with
the auto maker resigned from the group on Tuesday.
Jim Graves, a former software developer from Celebration, Fla.,
who is part of a group called the Main Street Bondholders, said he
couldn't bring himself to either support or reject GM's proposal
that bondholders swap $27 billion in debt for a 10% stake in
GM.
It's the latest sign of resistance to GM's efforts to slash debt
ahead of an increasingly likely bankruptcy filing.
"I did not want my continued participation on the committee to
in any way compromise our ability to act in our best interests
going forward," Graves said in a statement.
GM and the U.S. Treasury had been in negotiations with the
bondholders committee, which until recently was comprised of
institutional bondholders. A separate group of individual
bondholders who hold about 20% of GM's bond debt recently began to
organize in protest of the offer. As part of that effort, Graves
joined the ad hoc committee. He wouldn't comment on why he resigned
beyond the statement.
GM has said it will be forced to seek bankruptcy protection by
June 1 if it doesn't get 90% of bondholders to agree to the offer,
which could leave them with pennies on the dollar from what they
are owed by GM. The auto maker has conceded a bankruptcy is the
"probable" scenario.
The offer expires at midnight. GM is expected to disclose
Wednesday how many bondholders signed off on the debt swap. As of
Tuesday evening, the number was very low, according to people
familiar with the exchange.
The auto maker could decide to extend the deadline for the
exchange to appeal to more bondholders, a decision the company said
it would make on Wednesday.
Graves previously had said he and his mother stand to lose most
of $100,000 in GM debt they were counting on for retirement.
-By Sharon Terlep, Dow Jones Newswires; 248-204-5532;
sharon.terlep@dowjones.com