Quinnesec are nervous -- just trying to remain hopeful that the company does not fold but Quin is still the most solid of their mills so it won't go down unless the entire company goes down.....which could happen the way it is levered - they need this economy to keep expanding and for paper use to rise - capacity is being lowered by others like IP but it is still a tough battle and as noted - this is one fat leveraged company with shareholders compliant to the debt holders. Get a pasty and pray. Boolean
Mr Market is not betting that the debtholders will get fully compensated in the event of BK. Fidelity is listing August 1, 2016 11.375% notes for $44 (for $100 note) which gives a theoretical yield of 49%. This bond is rated CCC, but the price tells me that VRS will be long gone before this bond comes due. This low price tells me that the indebtedness is a lot higher than the assets. I like yield as much as anyone, but I am not going to touch this bond with a 10 foot pole. Good luck. Basically that says that this stock is virtually worthless because as you noted, the stockholders equity is subordinate to the bondholders.
If you have a job there I would be looking else where or least packing the freezer with pasties now so you can eat if the gate closes. This company was raped and pilaged for all its worth and the winners are never the little guy.