U.S. SENATORS AND GM BANKRUPTCY
About a year ago when the market was declining, my wife, Judy, became
concerned about the substantial losses in her market portfolio.
However, I felt that instead of shifting to bonds she should
retain her mutual funds and invest in General Motors Corporation and
Ford Motor Company (I had some success in trading in Ford stock
earlier).
Since I believe what is good for the gander should be good for the
goose, I felt I should follow my own advice and purchased shares of GM
and Ford.
I made a profit with Ford but with news of the government taking over GM
and issuing new stock to replace the old, I felt that I should do what I
can to change the situation.
I do not believe that spirit likes to see opportunities created
by men being taken over by the government, especially with substantial
losses to many individuals.
I believe that President Barack Obama has good and necessary ideas to
keep the economy from collapsing further, but not on the backs of many
of our citizens. Therefore,
I wrote and emailed the following letter to all 100 of our U.S.
Senators:
September 25, 2009
Dear Senator:
I am requesting legislation that would assure that an entity, and
perhaps even General Motors which filed for Chapter 11 of the Bankruptcy
Code, can maintain the original purpose of the chapter:
to assist the entity to stay in business and guide the
proceedings to an adjudication that is fair to the owner(s) of the
company, including common shareholders.
I bought 5,000 of shares of General Motors common stock before the
company filed for bankruptcy.
My stock is likely to become worthless when the government allows
sale of the "New GM" stock.
I believe Chapter 11 which is distinct from Chapter 7 (liquidation) was
originally enacted to restrain creditors of an entity desiring to
substantially remain in business from extremely disrupting the operation
of the entity with numerous lawsuits and thereby splitting it apart
little by little. Therefore,
shouldn't this distinction be maintained and an entity be allowed to pay
off its debts as quickly as it can, even if years pass by?
In this manner the rights of everyone, even shareholders, who by
law own the company, would be protected.
Any problems GM or another entity has with its creditors can be solved
by the government lending the entity sufficient funds to keep its
creditors solvent. Perhaps
such an application can be made available to any company during the
bankruptcy proceedings.
As for the U. S. Government owning General Motors or another entity
which has been lent money:
I believe the closest analogy would be to consider GM or the
entity to hold the investment by the government in trust, and when it
pays back the government, the interest of the government would be
liquidated.
All the government need do, if
necessary, is temporarily control GM or the entity!
Of course General Motors needed rescuing.
However, the rescuing would not have been needed if the
government did not permit homes sold without significant down payment
and the legalization of Credit Default Swaps!
Many have lost (or will lose) their life
savings with government action in General Motors' bankruptcy. Are we at
a point in the history of our nation that we need to wantonly terminate
a party’s rights in property?
Are the shareholders harming or depriving others of their rights
by their ownership of stock?
Even Michigan’s Governor Jennifer
Granholm encouraged people to purchase shares of GM!
With fair taxation of everyone in our nation, we as a nation can afford
to let GM take years to pay off its debt, because with fair taxation the
money would come pouring into the United States Treasury.
Sincerely,
David C. Hakim
davidhakim@hotmail.com
www.davidhakim.com