@Digiman
If you want to get into the details - search for the 20-F form for commodore international.
Relevant snippet:
"In May 1987, the Company issued $60 million of senior and subordinated notes
with warrants to purchase 2,250,000 shares of capital stock to an insurance
company. The warrants are exercisable at $11.40 per share until March 1994. The
Company repurchased 750,000 warrants in March 1989 for $4.5 million and an
additional 750,000 warrants in April 1991 for $4.5 million. In March 1993 the
unpaid balance of $8 million of subordinated notes were retired in exchange for
a similar amount of senior notes. In August 1988, the Company issued an
additional $50 million of senior notes to two insurance companies. The notes
are uncollateralized.
As of 30 June 1993 the Company was in default under the provisions of the
notes. The note agreements contain various covenants which, among others,
provide for the maintenance of a minimum level of net worth and contain
restrictions on dividends. For financial statement purposes the entire amount
of debt has been reclassified as current. The Company is engaged in
negotiations with the lenders to restructure the debt, although there can be no
assurance an agreement will be reached.
As of 1 November 1993, the Company received a waiver of non-compliance with
the provisions of the note agreements through 31 January 1994. The waiver
provides that the exercise price of the 750,000 warrants is reduced from $11.40
per share to $3.50 per share and the exercise period is extended from March
1994 to March 1996. In addition, the exercise price is further reduced to $.50
per share if the interest payments due on 1 January 1994 are not made in full.
As of 30 June 1993 the Company was in default under a real estate mortgage
for $5.7 million. The bank commenced legal action which has been suspended
based on mutually agreed payment terms. For financial statement purposes the
entire amount of the mortgage has been classified as current.
As of 30 June 1993 the Company was in default under an equipment loan for
$13.0 million. The Company intends to sell the equipment in the near future and
retire the debt. For financial statement purposes the entire amount of the
equipment loan has been classified as current. "
