It would make sense if the creditors become the controllers.


Meaning, the most optimistic people end up holding all the debt, and they would prefer to reorganize, and install new management - rather than a new set of creditors refinancing the existing management.


So people buy the defaulting debt for the purpose of forcing a reorganization and installing new management of the assets.


Whereas the presumption is the assets will keep declining if the existing structure is refinanced.


It's a virtual liquidation, with the creation of a new set of shareholders in the form of whoever is willing to pay the most for the existing debt. There is no need to create new debt in another set of hands.


More or less...


eLROY