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Notes to myself, possibly of interest to others.
-- Bill Northlich

Thursday, April 22, 2010

GM Paid US Back - Not!

Jerry Fliint, Forbes, 4/21:  GM "...got $50 billion from our government, and $10 billion more from Canada. They have paid the U.S. back $7 billion plus interest...GM can say they paid us back because of the $50 billion in total support, only $7 billion was counted as a loan and the rest was traded for equity in the company that emerged from bankruptcy. But that is really an accounting trick so that GM doesn't have to pay interest on that money.

"What seems to have happened is that of the $50 billion given to GM, the company burned through some, and then paid back $7 billion from what they didn't spend.  We are supposed to get the remainder when GM sells stock...If GM sold 1 billion shares at $25 each, that would be $25 billion, not enough to cover the whole debt...

Still, we should be grateful.  General Motors is making progress, although it has a long way to go to achieve a solid recovery."

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