Probably not enough asset values to satisfy senior secured lender and junior both. Junior was likely under water and thus not in good bargaining position --- the deal struck was probably the best for all concerned and the junior knew that a going concern spinning off future cash was the only way to potentially recover most of their balance. Looks to me that the best solution for all parties involved was reached with some or all getting a bit of a haircut (at least up front, with upside potential down the road). jmho