It's kind of like Fox News reporting half of what someone says to create a misleading picture.
Here's the full quote:
"IStar Financial Inc., a property finance company, will begin negotiating next month with creditors on a prepackaged Chapter 11 plan, according to people with knowledge of the situation. The filing isn’t likely to occur until next year when debt comes due, they said.
IStar, a real estate investment trust, is also considering extending the maturities on maturing debt or proposing an exchange offer, according to two people familiar with the situation"
SFI is using the BK plan as a club with the bondholders and a sweetened conversion deal (including, possibly, equity) as the carrot.