Small GM bondholders seek talks with U.S. task force

WASHINGTON (Reuters) - A group representing up to 100,000 individual investors, many of them retirees, holding about a fifth of General Motors Corp (GM.N) debt asked the Obama administration on Thursday to intervene with the company on its restructuring plan.

"I wish the White House would take small bondholders into consideration the way they are taking the United Auto Workers into consideration," Jim Graves, a former GM employee, said at a news conference.

Graves, of Florida, and two dozen other bondholders spent two days in Washington this week asking lawmakers to press the administration's autos task force on their behalf.

"Small bondholders want to be part of the negotiating process," said Joan Pryor, a former antiques dealer from Connecticut.

Whether they get a meeting with the White House/Treasury panel overseeing the restructuring GM is uncertain as the company hurtles toward a bankruptcy that looks increasingly likely by June 1.

Bondholders with $27 billion of GM debt remain far apart on an agreement to restructure their investment. GM has offered them a 10 percent stake in the restructured company.

Bondholders have until the end of Tuesday to accept that offer. GM has indicated it would likely seek Chapter 11 protection unless about 90 percent of the total debt is wiped out.

Small and institutional debt investors have complained forcefully they are being treated unfairly compared to the UAW, which reached a sweeping agreement on concessions with GM earlier on Thursday.

The union is in line to own 39 percent of the new GM, under the automaker's business plan. The U.S. Treasury would have a majority stake in the company.

"What we expect as lenders is fair treatment," said Jim Dillahunty of San Diego, who wants to see GM survive but questioned whether the government's prominent role in restructuring and the planned outcome for debtholders will have a chilling effect on future investment in U.S. companies.

"The task force is undermining the confidence that we have in the system," Dillahunty said, adding that debtholders may be better off if GM were to seek bankruptcy.

(Reporting by John Crawley; Editing by Richard Chang)