In bankruptcy stock holders are irrelevant. The people who drive the process are the creditors which are the folks who own the debt. They tell the judge what they want to see and how they want to get repaid. Sometimes liquidating the company is better, sometimes taking a haircut on the debt to get the remaining amount back is the better option.

This is nothing new. Air Wisconsin did this on a slightly larger scale with US Airways. They gave them a DIP loan and turned around and sold the issued stock in return for the DIP repayment for around 4x what they loaned out. Their loan was guaranteed by assets so it was basically a lose nothing, win big kind of thing.