Not good news for Quickflix, page-60

There is a clause in the preference shares that makes them redeemable at face value if anyone other than the holder of the preference shares acquires more than 50% of the voting power. If one creditor is able to take control, the preference shares will need to be paid out.

It really depends on the terms of the option to convert debt to equity and rate it converts at. I'm not sure, but I feel like shareholder or court approval is required to issue an option that could grant that level of equity in a company.