I don't feel sorry for her or anyone else like her.. its a gamble. Sometimes ya win, sometimes you lose. Suck it up, learn your lesson and get on with your life.
Is it fair that the gov says fuck the small people and focuses on the majority big boy investors? No. But life isn't fair. They are the large investors who own the majority of the corp's stocks. Its expected that they obviously get the most attention, and there is nothing new about that. You'd expect the same treatment if you were them.
I would not expect the same treatment.
There is an existing structure that all investors, whether individual or institutional, use to partially identify risk before investing. Part of that structure is represented by what happens to shareholders and bondholders in the event a company BK's.
Much is left to the discretion of the BK judge as he dismantles operations as fluidly as possible. But, not everything is left to the judge. Senior secured debtholders are first in line with regards to receiving funds from the sale of assets or ownership in a new venture. If senior secured positions exist, they should be honored. If they don't, it's less an issue.
Some of the public's anger stems from what they perceive as the government's bastardization of this process. They cannot break contracts like this. It is illegal and penetrates to the core of our markets.
Of course, the market is not pure. Insider trading happens often. And frankly, I don't know if senior secured positions even exist (at least, those senior to the UAW's unsecured position). If there are, this is one of the most blatant examples of disregard for the existing structure we have seen in the last decade.
What is happening is sad. It is discouraging. It will have a long-term impact on how investors consider risk vs. reward and how much compensation they'll demand in the future to loan money to companies.
