Replies to post #25 on The Great Atlantic & Pacific Tea Co. 9.375% QUIBS (GAP.GI)

[56Chevy]

What I don't understand is how these convertible noteholders can remove themselves from the creditor class they belong and take the equity.

Creditors run the show in a BK. Period. They have the right to determine who gets what. Equity on the other hand has little to zero control in a BK - and why should they? - they are the "debtors"...they owe people money.

Exchanging debt for equity in this case is a Loan-to-own strategy and it will be done under the legal parameters of a Plan of Reorganization.

[56Chevy]

I also do not understand if they are able to do that, why the remaining senior unsub debt holders would not split the $40 million as priority holders of debt in BK.

Think of the POR as the 'beginning' not the end. It's a working document that might as well be written in pencil. Amendments (additions, deletions, changes, etc) to the original POR are common. With that in mind the numbers on who gets what will in all likelihood change. I'm optimistic as to the treatment for holders of GAJTQ.