More likely if there is an inability to refinance the banks...

More likely if there is an inability to refinance the banks would seek to partially convert their debt to equity (either preferred or common) and heavily dilute existing equity holders. This is because enforcing security on a professional services firm is stupid - it simply leads to clients scattering to the four winds and huge value destruction.

It would be a technical default with the costs of the default largely being pushed onto equity holders.