A new motivation for an IPO

Companies go public for a range of reasons. The good - to raise capital to fund projects, the not so good (perhaps) - to let existing equity holders cash out. But portfolio.com has an example I haven't seen before - to bail out the debtholders who are current being defaulted on. Friendfinder Network has been loosing money, has negative equity and is teetering on the brink of bankruptcy, yet is trying to pursue an IPO. As Felix Salmon of Portfolio.com succinctly states:

If anybody really wanted to own Friendfinder Networks, all they would need to do is buy up its bonds, refuse to modify the covenants, accelerate the debt, and force the company into bankruptcy, where it would be handed over to its creditors, with shareholders being wiped out.