here is the problem as I see it. LRS is worth at least 5x ECOS (at its current market cap). If they bought all the debt and converted to equity they would own less than 50%. You can't count their warrants since this is a value they already have a right to.
You have to issue shares to cover the shortfall.
One other point they really can't buy the debt without making a formal tender offer under the securities laws. It is a right to acquire voting securities of a registrant made by an insider. The tender would need to disclose any and all of their plans for ECOS.