http://www.zerohedge.com/news/2016-03-14/surprising-answer-what-energy-companies-have-spent-their-newly-issued-equity-proceed
"in effect, JP Morgan is raising equity in a company with questionable prospects and using the funds to repay debt the company owes JP Morgan. The arrangement allows JP Morgan to get its money out prior to lenders subordinated to it get their $401 million payment. That's smart in a way. What's the point of having a priority position if you can't use that leverage to get cashed out first before the ship sinks?"
Which goes back to what MatlinPatterson's Michael Lipsky said some time ago: "we always assume that secured lenders would roll into the bankruptcy become the DIP lenders, emerge from bankruptcy as the new secured debt of the company. But they don't want to be there, so you are buying the debt behind them and you could find yourself in a situation where you could lose 100% of your money."
For the answer why banks are scrambling to get out, ask the Dallas Fed.
And since the Dallas Fed won't answer, the question remains: if thesecured banks "don't want to be there", why are new unsecured equity investors so desperately eager to take their place, and just what do the banks know that these new equity buyers clearly don't?
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