New plan for GM may put government at odds with creditors


The federal government may take an equity interest in GM (GM) in exchange for some of the money it is owed for bailout funds. GM is encouraging its major creditors to swap their debt for equity, too.

Does that mean that the government gets a better deal than firms that have been owed money for relatively long periods? Some of these companies may not be able to afford to lose their positions as debt-holders in the car manufacturer. Not every financial firm owed money by GM may be in a position to take a huge hit on its position.