Francisco GMAC is Still Dead

Robert Farago
by Robert Farago

Poor Gina Proia. Not only does she have a last name that she can never leave for the order takers at Panera, but she also has to defend GM. AND look herself in the mirror in the morning. But plucky lass that she is, Gina (may I call you Gina?) is doing her best to fend off media enquiries about the debt-for-equity swap at troubled (as in death rattling) lender GMAC. The company needed to convert 75 percent of its $38b of issued debt into preferred stock to raise $30 billion in capital to become a bank. The deadline for the swap– upon which GMAC’s transformation into a bailout-rescued bank depends (no matter what Gina says)– expired Friday at 11:59pm. Since then, not a peep from the participants. Especially Gina. On Sunday, she played the inscrutability card: she’d let us know in the “near term.” Today, she told Bloomberg “Once the results are finalized, we will disclose that information.” Is she asking us to believe GMAC doesn’t know if it lives or dies or gets Uncle Sugar to change the rules? This could be much ado about nothing. Or it might be time for GM CEO Rick Wagoner to bone-up on his King Lear. So to speak.

Robert Farago
Robert Farago

More by Robert Farago

Comments
Join the conversation
4 of 8 comments
  • John Horner John Horner on Dec 29, 2008

    Off topic, but Iceland's financial system has already completely collapsed, and managed to take a goodly number of European banking customers for a surprising crash as well thanks to Iceland's banks buying up European ones. A massive banking empire was built upon the narrow base of 300,000 citizens sharing their own personal currency. Even after years of shrinkage, the city of Detroit still has over three times that many people. Laissez-faire capitalism strikes again. If you have a subscription, the WSJ has a summary article on what happened: http://online.wsj.com/article/SB123032660060735767.html

  • Carlisimo Carlisimo on Dec 29, 2008

    OK I give up... please explain the Franco references?

  • Willman Willman on Dec 29, 2008

    As said before, they'll just bend, -and then break, -and then break some more, the rules for GMAC. The last week or so, esp. the past 4 days is Feinberg of Cerberus calling up Paulson and Bernanke and saying, "Let's Make A Deal!"

Next