The Great Atlantic & Pacific Tea Co. 9.375% QUIBS (GAP.GI)

[Joe Stocks]

Reading through the yahoo boards it appears the thinking is that these 'Convertible Noteholders' have bought 80% of the senior debt. They have partnered with an investor to take their holding and some cash to take over and be the new common stock holders. They propose that their offer would leave about $40 million for the other creditors to split up. I don't have a good number at the moment of how much other debt there is and what the deficit would be for the $40 mil to be split. Rough number tells me about 5 cents on the dollar if all are treated equal.

What I don't understand is how these convertible noteholders can remove themselves from the creditor class they belong and take the equity. Again this is a proposal from them and maybe wishful thinking. I also do not understand if they are able to do that, why the remaining senior unsub debt holders would not split the $40 million as priority holders of debt in BK. That would offer about a 15 cent return on the dollar.