The Latest GM 'Offer' Discriminates Against Individual Bondholders, Says GM Bondholders Unite (GMBHU)

SAN DIEGO, May 28, 2009 -- "The latest GM 'offer' sends a chilling message to all individual bondholders, not just those, like us, holding GM bonds: contracts in America are no longer worth the paper they are written on," said GM Bondholders Unite (www.gmbondholdersunite.com), a grassroots organization representing individual GM bondholders across the country.

The "offer" to individual GM bond investors is ridiculously lopsided because it arbitrarily favors other groups, at the expense of the legal rights, under the U.S. Constitution, of hundreds of thousands of individual GM bond investors.

Bonds are popular "conservative" investments because of the protections outlined in their covenants, which show where bondholders stand in the event of a restructuring or bankruptcy. In return for this security -- as outlined in the U.S. Bankruptcy Code and protected by the U.S. Constitution -- bond investors agree to receive a lower rate of return than they would have otherwise.

The biggest buyers of bonds -- individually, or through mutual funds and pensions -- are the elderly, the retired and families saving to buy a house or send their kids to college. The latest "offer" tramples upon the rights of all of these people.

We aren't asking for a bailout or a handout, just a fair deal. So we have no plans to back down.

What's more, the long-term implications of this "offer" are far greater than the life savings, retirement funds and quality of life we are already likely to lose. By choosing who gets paid more and who gets paid less, instead of adhering to bond covenants and the bankruptcy code, our leaders have chosen the arbitrary rule of man over the established rule of law, a dangerously slippery slope.