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6. Owls.com is eminent on defaulting on interest payments to their bondholders. They must restructure their debt or be pushed into bankruptcy. They have three

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6. Owls.com is eminent on defaulting on interest payments to their bondholders. They must restructure their debt or be pushed into bankruptcy. They have three creditors with different priority of claims. Recall that legally there is absolute priority. Chase Bank Loan (highest priority) Senior Bonds Junior Bonds S300m S 120m S 90m Owls.com has two proposed plans. If one plan is agreed upon by all creditors it will allow Owls to solve its liquidity problem. Plan 1: 55% chance the value of Owls.com will be $600 and 45% chance the value of Owls.com will be $80. Plan 2: 45% chance the value of Owls.com will be $430 and 55% chance the value of Owls.com will be $250. A) If you are the bank's representative which plan do you prefer and why? B) Is there a problem here with the creditors agreeing to the same plan and why? C) Is there a solution to this problem that will keep the firm from going into bankruptcy court? If so, what is it? If not, why not

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