How can you tell that the bond holders are about to take over GM stock?

Question

Or Ford for that matter......disolving common stock in the process.....What is your first clue?

Answer 1

If either company defaults on the interest payments, that would throw the company into bankrupcy most likely.  One of the possible outcomes of such an action would be a reorganization of the company in which the bond holders would swap their bonds for stock in the reorganized company.  In the case of Ford and GM though the pension funds would probably be the only claimants to get anything at all.

Answer 2

Bond holders are lenders to the companies, they do not have any equity position or voting power

They would have to have a class action suit against the company, which would be very expense.   Once they filed the suit, it would make the papers big time.

There would have to be a solicitation of the bond holders which requires the use of outside vendors to solicit, and to do a mass mailing.  Usually when there is a mailing such as this, the word get out fast.