GM Bondholders Try to Salvage Investment

Under the terms of the restructuring proposal, the government will get an equity stake in the company of 50 percent or more, the union's health fund will receive a stake of as much as 39 percent, and bondholders will receive 10 percent.

The bondholders' primary complaint is that they have been asked to swap $27 billion in debt for a 10 percent stake, while the union health plan would get a much larger equity stake in exchange for giving up $10 billion in debt claims.

Administration officials have argued that the union needs to be accommodated because it is making labor concessions and because its cooperation is required to revive the company.

Moreover they note, some of GM's bonds were purchased on the cheap after the value had plummeted, and their owners are now demanding unreasonable returns.

For example, Crowe said he had purchased a small portion of his bonds in February and paid only 12 cents on the dollar for them.

About 75 percent of GM's bonds are held by financial institutions, and about 25 percent are held by retail investors.

During a Senate hearing yesterday on the Troubled Assets Relief Program, Sen. Bob Corker (R-Tenn.) questioned how bondholders are being treated.

"The bondholders basically becoming toast to me is something that's very politically, philosophically motivated in a way that shows no balance," Corker said.

Staff writer Kendra Marr contributed to this report.