The argument goes like this: when FnF are fully capitalized they will have $125B in capital (this is the other poster's number, but it seems reasonable to me). The market cap of the company will be $250B (another estimate, and also reasonable in my opinion). That means every $1 of capital is worth $2 of market cap.
The juniors will have $33B of that capitalization, so to get them to convert to common they will demand enough commons so that their $33B of capitalization is worth the same multiple, i.e. $66B. That's basically the price of being willing to move down the capital structure.
I believe that's how he gets to 2x par for the juniors in a conversion. I'm not sure where the extra 0.09 comes from.
The key to his argument is that he believes that the recap and release will be handled like a Chapter 11 bankruptcy (yes I know that FnF are not actually in Ch 11, but that doesn't mean the resolution can't follow along similar lines). Evidently, things like this (conversion based on the multiple of market cap compared to capitalization) happen in bankruptcies often.
If the SPO buyers insist on a junior conversion (which they have an incentive to do in order to clear out the equity part of the capital structure above their new commons), the juniors (even non-plaintiffs) might end up having a ton of negotiating leverage. On top of the court cases, even.
The existing commons sure wouldn't like this, so the common shareholder plaintiffs would likely have to be paid off individually, and the rest of them get told to pound sand.
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