Reply #13: Yes.

[Statistical]

Bondholders are give the right to force a company into bankruptcy for non payment.

If you as a CEO don't want that risk then....... don't issue bonds.

Also your math seems to indicate a lack of knowledge on how bonds work.

Bonds are issued at a face value of $1000. A bondholder gave $1000 up front (or more likely a large multiple of that) to Chrysler in exchange for a promise.

The promise was $66.25 (6.625%) per year in interest (on each $1000 issued) in 2002.
They will receive that $66.25 for 30 years (2002 to 2032).
In 2032 Chrysler will pay back the $1000.

Nobody has made 100%.

Because of the risk of BK the bond is trading at $0.56 on the $1.00.

A $1000 bond can only be sold today for $560 (a substantial LOSS not gain).

Bondholders shouldn't be forced to accept (potentially worthless) equity in exchange for higher protection.

Bankruptcy law is already clear. Bondholder can force restructuring or liquidation IF company fails to pay bondholders. So if/when Chrysler fails to make interest payment it is in default.

Until that time some bondholders can CHOOSE worthless stock in exchange for their bond but can't be forced to do so.

What is someone forced you to accept worthless Fannie Mae stock in exchange for the equity in your home?