Why should people all over suffer because of bad bank management? Those people should of did their due diligence with more effort. I am confident there are other banks out there in a much more viable position. The EU should have not allowed Cyprus in along with others. This is a moral hazard.
As for losses all over, other people have foregone paper assets for more tangible ones, they would of been fine. This has just pro-longed the instability imo. As RP has mentioned the debts have to be liquidated sooner or later. Outright robbing people by legal intrigues is not a honorable solution.