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| Big industry is doing that. GM proposes to convert bonds (which are contracts) to common stock worth a few pennies on the buck of debt. Lehman Bros bonds are worth a couple cents on the buck. Bankruptcy gets out of paying those legitimate debts. Bond holders get more than stock holders, but not much more it looks like.
I'm bitter, I loaned LEH $29,000 a couple years ago for the promise they would pay it back eventually and pay 5 to 6% interest in the mean time. After they filed for bankruptcy, they aren't paying the promised interest and their bond value is 3 or 4 cents on the dollar, better than their stock price that was over $100 two years ago and now oscillates between 3 and 5 cents a share.
Big industry has been screwing the investor for centuries. Virtually every railroad in this country went bankrupt more than once wiping out their debt and their investor''s fortunes before completing their initial construction.
Gerald J. | |
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IL Family Farms
