What I don't understand is how these convertible noteholders can remove themselves from the creditor class they belong and take the equity.
Creditors run the show in a BK. Period. They have the right to determine who gets what. Equity on the other hand has little to zero control in a BK - and why should they? - they are the "debtors"...they owe people money.
Exchanging debt for equity in this case is a Loan-to-own strategy and it will be done under the legal parameters of a Plan of Reorganization.
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