A debtor could avoid paying a mechanic's lien or bond creditor
by simply paying them and then filing bankruptcy.
Nearly 96 percent of holders of unsecured limited-tax GO bonds turned down the plan, while 87 percent of unsecured unlimited-tax GO bond creditors
voted for it.
He criticized the "scorched-earth" legal strategy of the bond creditors
as a waste of time and money, and said the city had already spent $6 million to $7 million on the mediation and legal costs.
Klausner's bond creditors
have already waived EUR 5.7 million of the debt and may give up a total of EUR 100 million.
CACs are a useful tool for improving collective action on the part of bond creditors
, and they stand to facilitate debt restructurings.