Mick, with respect, NO. You can’t extinguish the bond holders rights without liquidating the entity that issued the bonds.
‘’To put that another way, Virgin doesn’t get to say “bondholders, you have done your dough” and then enters into an agreement to borrow and repay money to Bain or the Federal government, or Queensland for that matter.
If the bond holders go under then EVERYONE has to go under and that usually means liquidation.
I don’t give a flying #$%^ what deloittes, Bain, Virgin, GT says, this is the stuff of multi year court cases because each situation is different. Of course Bain wants to screw the unsecured creditors. Deloittes is supposed to have the interests of ALL the creditors at heart. What the bond holders are concerned about is that this does not seem to be happening as far as they are concerned.
Pari Passu means that all members of the same class of creditor have to be treated EQUALLY. That also extends through time. If that were not the case, companies could finance themselves forever by defaulting on their current debt and then taking on new debt, then defaulting, rinse and repeat.
The practical market for defaulted bonds revolves around buying worthless national bonds and then, when the country tries to borrow more from the IMF, world bank, etc. sticking it to them to pay out their existing bonds before they can borrow again. Patient traders make lots of money this way.
I wouldn’t even be surprised if a predator wasn’t offering to buy the Virgin bonds at a deep discount right now. This is heavy legal stuff above my pay grade, but saying “the bond holders have no rights” is bull****.
And to put it yet another way, the idea that 51% of creditors get to screw the other 49% is bull**** for the same reason. This is the stuff of long court cases, there is nothing sacred about a ‘’deed of company arrangement” - it’s just like a union ambit claim.