Run of River Power Inc V.ROR

RE: RE: RE: Insiders bankrupting company

[smoking81]

This company is swimming in debt. They have $10.1M of long term debt and $3M of debentures and convertable debentures with more to come. On the long term loan they are out of compliance and the lenders have provisions in the loan agreement that enable the lender to take certain actions under such noncompliance circumstances. These actions consist of 1) increase of the interest rate from 6.33% to 7.5% effective April 30, 2010; 2) increase of the debt service reserve to 9 months from the original level of 4 months, funded over a six month period; and 3) monthly cash sweep of any excess cash after debt service. This means any new money they raise goes to service the debt which is far greater than any equity value. There is no way they can raise any more debt so they need to find a partner in order to continue. Probably going to go overseas as no one local seems to have stepped up so far.