an orderly liquidation
There is no such animal.
American Community Newspapers {originally Courtside Acquisition), currently trading at $.01 on the Pink Sheets, will soon be joining Equity Media in Chapter 11:
As previously reported, the Company is not in compliance with certain terms of its credit agreements, including financial and payment covenants, violation of which constitute events of default under such agreements.
The Company and its financial advisors continue to work with its lenders to restructure the Company's debt. While the Company does not expect its lenders to immediately terminate its credit facilities and/or demand immediate repayment of outstanding debt, they have the right to do so as a result of the events of default. In such event, the Company's senior lenders could seek to foreclose on their security interests in ACN's assets and those of its subsidiaries. Alternatively, the Company's lenders could exercise the other rights and remedies available to them under their respective credit agreements. Such actions would materially and negatively impact the Company's liquidity, results of operations and financial condition. The Company's senior lenders have restricted the Company's access to additional borrowings under the Company's credit agreement with them.
Since there is no assurance that the Company's negotiations and/or restructuring efforts with its lenders will be successful, the entire $144.8 million aggregate balance of all loans outstanding at September 28, 2008 has been reflected as a current liability in the accompanying balance sheet. This has resulted in a liquidity deficiency of $139.1 million, the amount by which current liabilities of $151.8 million exceed current assets of $12.7 million at September 28, 2008. Any restructuring that reduces the Company's outstanding debt is likely to have a substantial impact on the Company's capital structure, including but not limited to its common equity.
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