Are the debentures secured or not?This question came up here recently. The answer is that they are secured. It is in their name. See the information circular for the meeting on Sedar where they are called by their full name:
5.00% SERIES G REDEEMABLE SUBORDINATED
SECURED DEBENTURES.
You will lose that security if the deal goes through. That is one reason why I am voting no.
They are subordinated, which means that they stand behind other secured debt in the hierarchy of payments in the event of a liquation (which might be in our future). But importantly, they stand ahead of unsecured liabilities, which could include regular trade debts (like utility bills), corporate credit card debt, salaries due, unfunded pension liabilities, unpaid bonuses and golden handshakes, and so on. Needless to say, in a liquidation, secured debt stands far ahead of the trust units we are slated to receive.
If this proposal is accepted, it might be to management's advantage to allow LRT to go into receivership. If they could convince a court that they are insolvent (shouldn't be too hard), then they could propose a restructing where the remaining secured debt holders exchange their debt for equity and the existing equity/unit holders are eliminated.
This site describes the debentures position in the hierarchy of liabilities:
https://apps.tmx.com/TSXVenture/TSXVentureHttpController?GetPage=NoticesContents&PO_ID=1065326&NOTICE_ID=235717&CORRECTION_FLG=N&HC_FLAG1=checked