I had a look at BlueStar and while generally I agree with your analysis I found one thing in their report I didn't like/understand.

There is a significant amount of inter-party lending going on with I believe the owners being paid back both similar principal amounts as the banks and at an interest rate the same as the bonds penalty rate (13.1%)!!

How did they manage that one? Instead of injecting real equity they inject in another company and get paid out on their loan before current debt holders and receive a very good rate of interest on it.

Also this bit in the accounts:

NOTE B This loan has been made by Blue Star Group (New Zealand) Limited (formerly Blue Star Print Group (New Zealand) Limited) to BSGIL to assist in funding senior debt obligations under
the SSCFA. As mentioned at note 4, each Group member is a guarantor under the SSCFA.
Interest on this loan is accruing at the interest rate applicable to the Subordinated Capital
Bonds under the Subordinated Capital Bonds Trust Deed, which is currently 13.1% per annum.
The loan is unsecured and is subordinated to all external indebtedness of BSGIL but will rank pari
passu with all other intra-group indebtedness of BSGIL. The repayment date for the loan is 26
August 2012, although that date may change if the maturity date for the Subordinated Capital Bonds, or the maturity date under the SSCFA, or both, is amended.
As I understand it the company has no right to amend the maturity date for the Subordinated Capital Bonds?