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“She’s a wreck. She’s a person who puts a smiley face on everything, and she can’t put a smiley face on this one,” Mr. Graves said.

His mother invested $100,000 in GM in 2003 to provide for her retirement. Mr. Graves said her income will fall by a third.

“She’ll be OK, but she may have to give up her home and visit her grandchildren less,” Mr. Graves said.

Mr. Graves said he and his mother hoped that they would see a return in profits by holding on to their bonds, even as GM was falling.

“I don’t think any of the bondholders ever thought GM would collapse,” he said.

He said his mother is “looking for me to tell her what to do. I’m pretty smart, but I can’t tell her what anything means with this.”

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Joan Pryor
Family: Husband
Date of purchase: N/A
Percent of portfolio that were GM bonds at purchase: “A significant portion.”
Percent of portfolio now: N/A
Reason for purchase: Safe investment for a retirement income
Reason for holding after downgraded to junk status in 2005: Was told to wait it out
Original investment goal: Retirement income

Six years ago, Joan Pryor and her husband bought GM bonds for their retirement. Neither had a pension, and they felt they needed more retirement income than Social Security could provide.

“I’m worried, very worried. I have to figure out how to earn more income,” Mrs. Pryor said. “We’ve had to cut back on charitable donations, which is hard, and we don’t want to.”

Mrs. Pryor said she has had to shop for cheaper phone and cable TV arrangements.

“We’re not concerned with building a nest egg anymore,” she said. “We’re trying to use the nest egg to live on,” and that amount has been shrinking because of GM’s problems.

Mrs. Pryor said she thought bondholders held a privileged place among debtors during a bankruptcy. “A lot of people told us to hang on to the bonds,” she said.

She said the terms of this bankruptcy do not make her feel privileged at all, and she is no Wall Street titan.

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