- The Washington Times - Monday, June 15, 2009

Bill Zastrow
Age: 58
Residence: Massachusetts
Occupation: Software executive
Family: Four children
Amount invested in GM bonds: $240,000
Date of purchase: 2005 before downgrade
Percent of portfolio that were GM bonds at purchase: 12 percent
Percent of portfolio now: N/A
Reason for purchase: GM was a large, profitable company with high-yielding bonds
Reason for holding after downgraded to junk status in 2005: Knew bondholders had strong claims in event of bankruptcy
Original investment goal: College savings

Bill Zastrow is chief executive of FileMark Corp., a Massachusetts software company. He is a single father of four children: an 18-year-old son who just finished his first year of college, a 17-year-old daughter who just graduated from high school and two preteens who live at home.

Mr. Zastrow has more than 30 years’ experience investing in bonds and purchased $240,000 of GM’s debt before they were declared “junk” bonds by Wall Street ratings agencies. He went in with his eyes open, he said. He thought he was limiting his risk by investing in bonds instead of stocks.

“I knew what I was doing, and I knew the risks,” Mr. Zastrow said. “I’d always been assured that in a bankruptcy, the bondholders come first.

“I thought about selling, but it was paying good interest and GM didn’t really get into trouble until just last year.”

The income went into a trust for his children’s education. Because of GM’s bankruptcy, the college money will have to come from his individual retirement account instead.

“They robbed me out of five years of work,” Mr. Zastrow said. “I will have to work another five years because of this development.”

Click here to view vignettes of seven other GM bondholders.

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