The best scenario for the debt holder in a public company is a default followed by a court mandated judgement to secure payment along with a high percentage default interest rate. Then use the legal system to force collection, and finally personally bankrupt the individual managers and their advisers.
Convertible promissory notes are tied to a stock price according to terms when the note is due. For example 50 percent discount to the bid or whatever the terms of a note are. All notes are different and some upon default can be not so good for the companies. Real simple if they take the money they need to pay it back and usually its a 6 month period. Notes have a pay off period and if they choose to pay it has to be paid before the due date or its in default. TXHD refused to not only pay noteholders back but also to not convert the notes. That is where it gets well enough said but not good for TXHD to purposely refuse both.
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