W2007 Grace Acquisition I, Inc. (fka WGCBP)

[Olmsted]

I don't follow the author here:

The preferred shares seem to have an interest in only 1 percent of the assets. If Goldman could find a way to put the 1 percent owner in bankruptcy, while keeping the other 99 percent out, it might be able to largely eliminate the preferred.

Does that make sense to anyone?

The next paragraph makes much more sense - basically what took down the Eagle Hospitality preferreds, but of course would be inviting a lawsuit:

Even that might not be necessary. Goldman was also the lender in the deal, and perhaps it could restructure the debt in ways that would essentially give the debt holders — Goldman, that is — the ability to get everything, leaving the preferred shareholders with nothing.