. Alexander Real Estate is to be liquidated. The book value of its assets is $30 billion. Alexander has two issues of bonds outstanding:

- Bonds with a face value of $12 billion are secured by a mortgage on the company's Toronto and New York buildings.

- Alexander has other unsecured bonds outstanding for $15 billion.

Apart from the security on the first series of bonds, the two bond series are of equal seniority. Book value of equity is $3 billion. $500 million will be used to cover administrative costs of the bankruptcy and other business claims (such as wages due).

Alexander has a liquidating value of $15 billion of which $5.5 billion will come from the sale of the company's Toronto and New York buildings. If you follow the bankruptcy liquidation rules strictly, what would be your proposed distribution? State one reason why the bond-holders may agree to not follow the proposed distribution.