Arbitrage opportunity

From a reader's letter in the FT:

Lehman Brothers senior secured debt is currently trading at about 15 per cent of its face value, indicating that the bondholders are likely to lose 85 per cent of their investment. This indicates that those ranked below the senior bondholders, including equity holders, will lose everything.

However, Lehman Brothers equity, which is traded on the over-the-counter market, is currently trading at 15 cents, which indicates that equity traders believe that after all outstanding claims are paid off there will be cash remaining for the equity holders.

As the reader points out, "the price is not always right": the people trading in shares are considerably more optimistic about the outcome of the liquidation than those trading in the bonds. The first group assumes that enough assets will be recovered so that bonds will be repaid in full and the second group assumes that they won't. Although both may be making a reasonable guess, they can't both be right.

So, assuming that the facts as stated in the letter are correct, what's the arbitrage opportunity? Click and highlight to reveal:

Sell the shares short at 15 cents and buy the bonds at 15 cents.

The first 100 cents that the liquidator collects will be used to redeem your bonds. If he collects less than 15 cents, you lose on the bonds but win a larger amount on the short sale as the shares will fall to nil. The next 85 cents are used to redeem the bonds, reaping you a potential 85 cent profit on the bonds and a 15 cent profit on the short sale.

If the liquidator collects more than 115 cents, then you start losing money on your short sale, but he would have to collect 200 cents before you actually make a loss overall, which is at least fifteen times as much as the markets are expecting so this would seem highly unlikely.