Legal Question in Business Law in Arizona

If you are able to negotiate an agreement with your creditors to exchange the sums owed for stock/ equity in the company, there is no law against that, it just has to be done properly. How that is done depends upon the type of legal entity which the company is, sole proprietorship, partnership, corporation, LLC, etc. You should use legal counsel to accomplish your goals and to avoid disputes later, when the company is successful or if the company fails.