For the bond holders to see that money they still have to dump those shares. One way or another they'll have to hit the street to be worth anything. Even if they are issued to the holders at an average of .28 they still will dilute the amount now available for trading meaning anyone holding onto their shares will see them drop since their market share is also diluted with it. If the stock was issued and the price didn't change accordingly it'd be no different than them printing their own money. One way or another, regardless of who gets the shares or how they get them, once those shares leave the companies hands the price/value of the ones currently out there will plummet.

Let me spell it out like this.

Bond Holders:"Hey guys we sure appreciate the money for the bonds that are coming due".

JO:"OH... yea... errr........... lets see I need to find a way to NOT pay you that money because... well... we don't have any. I know how about I avoid declaring BK right now by simply giving you a big bag of air and calling it stock repayment since it was agreed on in the past. That way my debts to you legally taken care of yet by the time you get to cash those shares out, if ever, they'll be worth nothing anyway! YAY I've avoided less people in line at the BK courts and can keep flying current contracts right now because if I had declared BK papa DAL would cut me off at the knees. Just a little more time to get golden parachute all lined up and papers burned so I don't go to prison!!" "Hey you there's porn on all the computers upstairs go start erasing everything!".