From what I understand iStar has two options.
1. effect a cde (coercive debt agreement) which Fitch regards as a default, but it's atually a negotiation with bondholders about changing the terms of the debt. If this happens, then I assume the maturing $2.5 billion due this time next year will be restructured and potentially there will be repayment?
2. If the CDE doesn't work, it's likely to be a pre-packaged bankruptcy. If this happens, I'm not sure about the chances of repayment.

Over 50% of the loan portfolio consists of non-performing or 'watch list' loans, backed by condos and land. So I would assume unless things pick up rapidly in these two areas the chances of them getting money to repay debt is slim.

Plus, I think iStar's total debt is around $8 billion.

I don't know enough about bankruptcy workouts to advise on who is likely to get what. But it seems pretty bad on the surface.