Lind Gear failed to meet its loan covenants with its senior bank lender in the summer of 2008, just six months after it was acquired. While the senior bank debt was totally guaranteed and comprised only 6% of the capital used in the acquisition, it exercised its right to cease payments to Lind's subordinated lender that financed about 40% of the acquisition, pushing on that debt into default also.
These fiscal problems were the consequence of decreasing sales and profits at Lind as exchange rates and also the impact of the Great Recession took its cost on the business. With no quick option, Lind may be shoved into bankruptcy.
PUBLICATION DATE: August 18, 2011 PRODUCT #: 212012-PDF-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
