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Napanee, Ontario | as emtb said, there was a filing. But there was still a bailout.
Lehman is an example of what should have happened tho:
"Senior bondholders of the parent company will get about 6 cents on the dollar of their allowed claims in the first payment, while unsecured creditors of some Lehman affiliates will get 16 cents or more, according to a bankruptcy court filing in Manhattan today."
http://www.bloomberg.com/news/articles/2012-04-11/lehman-creditors-...
In fact, if you will recall, it was the Lehamn filing which actually brought on the whole 2008 collapse. Bondholders started panicking because they figured that was going to be the course of action - that others were going to go the way of Lehman, and they weren't going to get bailed out.
LIBOR raters spiked 400% and intra-bank credit froze up when bondholders realized that the 30 year credit boom gig was up. Loans ceased, and within weeks AIG (largest credit instrument insurer) was bankrupt and the whole system was about to fail when people realized the insurees (the big banks) weren't going to be covered by AIG or others.
That will happen again if gov'ts don't enact more QE or extend lower rates. GM wasn't really the problem, albeit they got the same favorable treatment. The problem was, and is now more than ever before - too much debt. When rates are allowed to price in the real risk, IE as in Lehman, the gig will be up and nominal instruments like paper bonds and massive swaths of derivatives will be defaulted on, and the holders will get almost next to nothing like above link. The collateral just isn't there.
Edited by OldMcdonald 8/24/2015 22:14
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