If you were to mark-to-market the debt right now it'd be a 100% write-down. $6M = $0 (100% worthless for all debt holders).
So taking a big haircut (say $5.4M / 90% for arguments sake) in reality represents a realization of liquidity. That doesn't mean conversions and haircuts happen without guarantees for the former debt holders to protect them from the managers (limitations on power, seats on board, etc, etc)
With a 90% haircut (just keeping the numbers consistent), debt holders have $600k equity interest. If the stock rises 10x they're made whole in the form of equity (goes from $600k to $6M). Means management needs to bring in a real operating company that can create that rise in market cap post all changes. If I were the debt holders, I'd find the company and bring them in. At least that way I'd have assurance they're real and can deliver.
Eventually the parameters are going to be the same: haircuts and conversion to equity in exchange for liquidity, or 100% of nothing. That's what's been happening here for years. Debt holders trapped in a reality of 100% of nothing, followed by R/S after R/S.
Can it change? Yes. Will it? I don't know.
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