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I'm baffled by the bad bet bondholders are making on a General Motors ( GM) bankruptcy.

Don't they realize that the Obama administration is calling the shots inside or outside the courts? That's how this will play out because the government will be pumping billions of dollars of taxpayer money into the carmaker and will therefore be brokering the bankruptcy terms.

I just can't see what these unsecured creditors think they will get from the courts after rejecting the restructuring offer to swap debt into stock.

I get that bondholders didn't like the idea of giving up their rights to interest and repayment on $27 billion in loans to the company in exchange for 10% of GM's shares.

A 10% stake is not a particularly good deal, and it must have been irksome that the United Auto Workers was slated to receive a 39% stake. Even after agreeing this week to trim its stake to 17.5%, the UAW was still going to get more than bondholders.

Meanwhile, the Obama administration was laying claim to 50%, with some reports indicating the government might end up with as much as 70% of GM when it later pumps more money into the company.

Facing all that risk to getting repaid, bondholders must feel they'll have better chances in bankruptcy court.

What they may not be considering is that just like in the apparently failed restructuring effort, the government will still hold sway in bankruptcy court because it will be funding the reorganization.

We've seen this before with the airlines, when a major financing partner steps up with a cash infusion and negotiates the terms for emerging from court protection.

Consider how hedge funds and airline-related investors gained 52% of US Airways ( LCC) after financing its bankruptcy reorganization -- while bondholders and other unsecured credit providers received stock at a rate of 3 cents to 17 cents on the dollar.

At United Airlines, the U.S. Pension Benefit Guaranty Corp. ended up with a 23% stake in the parent company, UAL ( UAUA), when it emerged from bankruptcy in 2006. Unsecured creditors got 4 cents to 8 cents on the dollar.

The only optimistic example is Delta Airlines ( DAL), which repaid unsecured creditors between 62% and 78% of what they were owed when it emerged from bankruptcy in 2007.

GM's bondholders can only dream of getting that lucky. Pennies on the dollar is the most likely scenario in a bankruptcy proceeding.

That won't live up to the dreams of all the folk who bought GM's bonds to one day pay for college for their kids or add a cushion to their retirement accounts.

Now it looks like the best they can hope for is to get the same 10% deal from the courts that they just rejected.

They better hope Obama doesn't hold a grudge.

Hall is the editor of TheStreet.com. Previously, he served as deputy editor and chief innovation officer at The Orange County Register and as a news manager at Bloomberg News in Frankfurt, Amsterdam and Washington, D.C. As a reporter, he covered business and financial markets, worked in both print and television in the U.S. and Europe, and conducted in-depth investigative coverage at The Journal-Gazette in Fort Wayne, Ind. His work also has been published in a variety of newspapers including The Wall Street Journal, The New York Times and International Herald Tribune. Hall received a bachelor�s degree in journalism and political science from The Ohio State University and has taken graduate management science courses at Boston University.

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