Although as one of the important take aways, I was surprised how complicated a capital
structure of a succesful start - up can be after several rounds of funding with different liquidation preference
rights, convertible
debt elements etc..
1) The bondholders could voluntarily agree to move a portion of their claims lower down in the capital
structure, swapping
debt for equity (preferred or common), allowing the bank to have a larger cushion of Tier - 1 capital, avoiding insolvency, and hopefully allowing the bank to recover by its own bootstraps, preferably assisted by
debt restructuring on the borrower side (via property appreciation
rights and the like).