GM woes wipe out suburban couple

June 4, 2009 2:31:01 PM PDT
Not only is General Motors bankrupt, but many of those who invested in the country's largest automaker have lost thousands of dollars worth of stocks and bonds, including a couple from northwest suburban Prospect Heights. Apparently, the old slogan 'what is good for General Motors is good for America' does not apply to 81-year-old Michael Byrne and his wife Lucy.

The couple, along with many other GM bondholders, got caught off guard with the bankruptcy filing.

Byrne said he's a G.M. bondholder with over $250,000 in G.M. securities and all of his I.R.A. and non-I.R.A. investments are in G.M. bonds. The couple did this in order to supplement their social security because G.M. was 'like a rock.' But now they're bankrupt.

"It will totally wipe out my I.R.A. and about 80 percent of our non-I.R.A. savings...Because of us, we had friends invest in General Motors securities, and we figure with all the friends we got to invest in General Motors we have gotten them to invest over $1 million," said Michael Byrne, GM bondholder.

"Unfortunately it's not great planning and I'm not sure why he ended up in that position. One of the first rules in investing is to diversify. The bondholders are going to be in a real tough situation. They may get some pennies on the dollar but effectively the equity holders and the bondholders are really going do be wiped out," said Jason Tyler, Ariel Capital.

Experts say the value of all the GM bondholders rest in the hands of the bankruptcy judge. It will be up to the judges to determine what the bonds are worth.

"There's nothing we can do except just hope that maybe the bankruptcy judge will have a little bit of compassion towards the bondholders and give them a better deal than G.M. and the government was offering," said Byrne.


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