veering off-topic here (if the original poll can actually be considered a topic, that is ) ...
Yep, bondholders are in the group of "unsecured creditors" who get paid after "secured creditors" and most definitely *before* stockholders. However, if the company is liquidated, there is certainly a chance that paying the secured creditors will exhaust the proceeds of liquidation -- which means that there is a chance that bondholders get nothing.

A lot more can be found at http://www.sec.gov/investor/pubs/bankrupt.htm

AZCivic,

Yes, that is true, IF the physical assets of the company exceed the value of the debt. I believe I read somewhere that GM has over 300 BILLION in debt out there. I doubt a bunch of 20 year old automobile factories are going to sell for over 300 billion. I suspect as David Harville notes, that the subordinated debt holders of GM bonds will have a rather rude awakening if GM does declare bankruptcy.

Eric

So, GM investor Kirk Kerkorian might want to see Dr. Jack Kevorkian?

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