From Risk.net, the Financial Risk Management News & Analysis website:

YRC is the first case in which allegations of so-called ‘empty creditor’ behaviour have gone public, although disquiet has been growing over the past 12 months (Risk August 2009, pages 33-35). In theory, an investor that buys bond-plus-CDS packages in a distressed company is incentivised to see the company fail – the CDS would trigger and the investor would get paid at par on bonds bought cheaply – but critics have yet to catch empty creditors in the act.

Empty Creditor Claim is a term used to explain that credit default swaps (CDS) [are used] to separate economic risk of investments from the legal rights inherent in those investments.

Explained further:

As Hu points out in the 4/10/2009 edition of the Wall Street Journal, there is nothing wrong with this risk hedging, this insurance; it is the exercise of freedom of contract. It does point up a change in the alignment of interests (economic and legal) which form the basis of our legal, financial and regulatory systems. Apparently, the suretyship doctrine of subrogation, where the guarantor “stands in the shoes of” and succeeds to the rights of the guarantee, does not apply to CDS. If subrogation did apply to CDS, the economic and legal interests would be properly aligned.

From the WSJ article mentioned above:

Thus the “empty creditor”: someone (or institution) who may have the contractual control but, by simultaneously holding credit default swaps, little or no economic exposure if the debt goes bad. Indeed, if a creditor holds enough credit default swaps, he may simultaneously have control rights and incentives to cause the debtor firm’s value to fall. And if bankruptcy occurs, the empty creditor may undermine proper reorganization, especially if his interests (or non-interests) are not fully disclosed to the bankruptcy court.

Translation: Nothing in the law prevents any creditor from decoupling his actual economic exposure from his debt. Therefore, [e]mpty creditors have weaker incentives to cooperate with troubled corporations to avoid collapse and, if collapse occurs, can cause substantive and disclosure complexities in bankruptcy. That uncertainly also forced the US tax payer to rescue AIG, among others, in Fall 2008.

Nothing in the law has changed that risk since then.