Two CT bondholders sue GM

A Southern Connecticut State University accounting professor and his wife are taking on General Motors Corp.'s plan to sell its assets in bankruptcy court, treading in an area that major investors and hedge funds have so far avoided, according to Reuters.

The two, who are representing themselves and say they hold $400,000 of General Motors Corp. debt, filed the suit on June 16 in U.S. bankruptcy court in Manhattan.

In court papers prepared without the help of a lawyer, Radha Ramana Murty Narumanchi, a professor at Southern Connecticut State, and Radha Bhavatarini Devi Narumanchi of New Haven, said they were among the "voiceless and defenseless casualties and victims" being hurt by GM's plan to sell itself to the government.

The couple estimated about 210,000 U.S. households that hold GM debt could "lose their shirts" in the GM bankruptcy.

The 100-year-old automaker filed for bankruptcy earlier this month, with a fast-track plan to sell itself to a "New GM" that would allow a much smaller company, owned by the U.S. and Canadian governments, GM's union and its unsecured creditors, to emerge from court protection in as little as 60 days. Under GM's sale plan bondholders could receive about 10 percent of the new General Motors.

There are other dissident bondholder groups, calling themselves "Main Street Bondholders" and "GM Bondholders Unite," that have also been trying to organize objections to GM's sale plans.

The Narumanchis said in court documents that they were seeking to head off "the loss we would suffer if the bankrupt GM is allowed to sell all its crown jewels to a 'good GM' headed by the U.S. Treasury, leaving all trashy, and worthless trinkets, to a 'bad GM,' to the detriment of unsecured bondholders."

Reader response:

"Isn't that part of the risk being a shareholder?'' -- Dick Bula

""They are bond holders, not share holders. Their first position under law in bankruptcy court is being ignored in favor of others who are neither bond holders or share holders, only interested parties or stake holders, i.e. unions.'' -- Peter, SBA of Hartford