re: #593 Killgore Trout

This is a classic bankruptcy strategy, although it completely shafts some creditors in favor of others. On its face, that could violate the principle of “equality of distribution” of a bankrupt’s assets among its creditors.

Another way to say it: the unions benefit from the issuance/sale of equity in the new company, as do some creditors (the “unsecured bondholders”). What happens to the secured creditors, and why is it fair to treat groups of unsecured creditors other than the unions and the unsecured bondholders unequally?

The unions and bondholders get the gold mine, and everyone else gets the shaft!