Small GM investors look at hard choices

DETROIT, May 21 (UPI) -- Potentially thousands of small investors holding General Motors Corp. bonds have been left with a tough choice as the U.S. auto giant considers bankruptcy.

For most corporations, about 1 percent of the bondholders are individual investors, sinking part or all of their life savings into a company. At GM, as many as a quarter of its creditors are in this category, The Los Angeles Times reported Thursday.

Investors like former die caster Dennis Buchholtz, who bought $98,000 in GM bonds when he retired, are contemplating GM's offer of a 10 percent stake in the company in exchange for a total of $24 billion owned to creditors.

Further, if the company files for bankruptcy, creditors may end up with nothing.

The offer expires Wednesday and a counter-offer of a 58 percent stake in GM has been ignored by the company, the newspaper said.

In the GM plan, the United Auto Workers would end up with 39 percent of the company, while the U.S. government would end up with a 50 percent stake.

"I feel so helpless. I'll take my chances in bankruptcy court," said Mark Modica, the business manager at Saturn dealership in Pennsylvania, who stands to lose $150,000.