[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/images/06/01/intv.debra.june.art.jpg caption="GM bondholder Debra June speaks to CNN's John Roberts."]
General Motors turns to bankruptcy today in the hopes of finding a new start. The move comes after a majority of those holding $27 billion in GM bonds agreed to swap that debt for a stake in the new General Motors.
Debra June is a small bondholder who six years ago invested $70,000 in GM bonds. She predicts that investment is now worth less than $200. She spoke to John Roberts on CNN’s “American Morning” Monday.
John Roberts: You invested $70,000 in GM bonds some six years ago. As a result of this deal, that is going to be converted to equity shares. What's that investment worth now?
Debra June: Well, what happened, John, I got this booklet at the original thing. This is a 200-page booklet and they sent this in the mail and the offering was two shares of stock for every $1,000. That's 140 shares of stock. They said originally in the booklet it was going to be 225 shares, but as you kept reading the booklet it said they were going to convert that to 101 reverse-split, which would be two shares of stock. $70,000 for 140 shares of stock.
There was no way I was going to take the deal. Then they came out and they sweetened the deal. And I tried to contact General Motors. I left a message with the people I called up. I talked to the people on the phone. I e-mailed two e-mails, “Please let me know what the deal is.” I'm with GM Bondholders Unite, the 60-plus group and also the Main Street Bondholders. What they're doing to the people is ridiculous. It's horrible. You're wiping out common people that saved money. I'm not a corporation.
Roberts: No, you're a school teacher, we should point out. So $70,000 is a huge amount of money to you.
June: It is. It is. And it's a shame. I mean what they're doing, they're saying 10% and this and that. I don't know what they're doing. People out there have saved their money. We've done the right thing. I pay my bills and here all of a sudden, they want to give me two shares. 140 shares of stock.
Roberts: And that stock, all in total is worth about what, $200?
June: I believe so right now.
Roberts: Maybe less than that.
June: Even less. When they regroup, even if the stock was $10. That's unbelievable. I mean I can't imagine someone doing something like that.
Roberts: So Debra, what was your reaction when you heard General Motors was going to go into bankruptcy? You said you resisted this plan, you didn't agree with this. The major bondholders were the ones who said go ahead and do this debt for equity swap. What did you think when you heard they were going into bankruptcy and that was the deal?
June: Well, I'm in shock. When I bought into GM, I thought it's a safe thing. I bought six years ago. I always thought it was safe even when the government came in. I was so excited, I said "Well they’re going to take over." But Obama’s task force, these people came in, they didn't negotiate. We had no say. The private investor had no say in the matter. They dealt with the big corporations. Obama is for the people, he said. How can you be for the people? How can he do this?
Roberts: So do you blame the task force? Do you blame the company, the unions? Who do you blame for getting in this situation?
June: I blame, originally, GM, for letting it go like this. It's like Bernie Madoff was their bookkeeper. It's ridiculous, but also for the task force to come in and not let anyone from the main sector, just a representative to go in there and try to negotiate. They never let us do that. I would have given...I'm not joking on this, I would have said to GM, "Here don't give me any interest, just take that." That would help them immensely… I mean to send this booklet out, the task force actually did this?
Roberts: So do you have any hope of recouping your investment? If this company gets lean and mean and agile, do you have any hope you can recoup that $70,000 and beyond that if the price of the stock goes up?
June: Nothing. Right now, I'm not even in on the new deal, the sweetened deal, I couldn't even get in on it. And that's - and it's in the paper. They didn't care about the people. It's in the paper.
Roberts: So you really feel robbed, do you?
June: I feel robbed. I know that there's an attorney out there for the GM bondholders Unite. That’s the gentleman Thomas Lauria and he's supposed to represent the small people. I hope and pray the judge, whoever gets this, is going to say “Wait, this isn’t right what's happening to the people, it's not right what's happening to the workers.” The dealerships are going to close. It's going to be a trickle down effect but they're taking income from me and thousands and thousands of other people who are in worse shape than I am and it's not right.
Roberts: We'll keep following this and maybe we can stay in touch with you and keep checking back.
June: Please, please people out there – contact your congressman. Do something. Say it's not right. I remember Michelle Obama said she was not proud of her country until her husband was in office. I'm a school teacher. If I was teaching her children, would she say she was proud that this is happening to a common person like myself? I mean you can't, you can't do it.