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Q: I read an article earlier this week about convertible debt in the cannabis industry. I think the company was Canopy. The exercise price on the convertible debt was reduced considerably to entice the bondholders. I assume creating more potential downside for the shareholders. In any case, my question relates to the management rights to proceed with such a move. Is it voted by the shareholders ? What would the alternative be ? Borrowing at higher cost ? If no event of default has occured on the bond (maybe there was a default?), why give a better deal to the bondholder ? Can you please provide general comments about debt holders rights vs management/shareholders rights. Thank you.

Read Answer Asked by Pierre on November 20, 2019
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