Printer Friendly

INTERAND REPORTS DEMAND FOR PAYMENT BY LARGEST CREDITOR

 INTERAND REPORTS DEMAND FOR PAYMENT BY LARGEST CREDITOR
 CHICAGO, Jan. 23 /PRNewswire/ -- Interand Corp. (NASDAQ: IRND) today


reported that, on Dec. 30, 1991, it received a notice of default and demand for payment from Yorktown Properties Inc., its largest creditor.
 Yorktown is wholly owned by the Eastern Air Lines Variable Benefit Retirement Plan for Pilots, which owns 565,311 shares (approximately 13.5 percent) of the company's common stock. Yorktown has supported the company financially for the last three years, and has loaned the Company $9.8 million, as described below.
 Under the terms of the notice, if the company did not pay all amounts owed to Yorktown by Jan. 6, 1992, Yorktown reserved the right to take all actions available to it under the terms of the various loan and security agreements. The company's financial condition prevents it from paying any of the amounts owed to Yorktown, which at Jan. 6, 1992, consisted of the following: $3,215,975 of unsecured demand loans, plus $350,373 of accrued interest thereon; $5,585,000 of secured demand loans, plus $1,335,741 of accrued interest thereon; a $1 million promissory note, plus $215,865 of accrued interest thereon, secured by a second mortgage on the company's facility; a $1,451,000 principal balance outstanding, plus $168,458 of accrued interest thereon, under a secured installment note assigned to Yorktown by American National Bank and Trust Company of Chicago on Dec. 30, 1991; and a $70,599 principal balance outstanding, plus $7,807 of accrued interest thereon, under a secured revolving credit note also assigned to Yorktown by the Bank on Dec. 30, 1991.
 In summary, Yorktown has demanded payment of $13,400,818, consisting of $11,322,574 of principal and $3,078,344 of accrued interest as of Jan. 6, 1992. The $5,585,000 of secured demand loans and the $1,521,599 of debt assigned to Yorktown by the Bank is secured by a first lien on the company's accounts receivable, inventory, equipment and intangibles. On Jan. 7 and 8, 1992, the company received courtesy copies of various legal documents from Yorktown Properties, Inc., including a "Complaint for Foreclosure and for Damages and Action on Unsecured Notes," a "Notice of Public Sale By Secured Creditor" (to be held on Jan. 23, 1992) and a "Notice of Public Sale of Collateral Under Illinois Uniform Commercial Code" (to be held on Jan. 23, 1992). On Jan. 14, 1992, the company received formal notification and was served the above complaint in the form of a summons served by the Circuit Court of Cook County, Illinois (Case No. 92 CH 00173).
 Since January 1989, the company's primary source of working capital has been loans made by Yorktown. Yorktown indicated that it will provide no further funds to the company, and the company has thus far been unable to obtain additional funding from alternative sources. Accordingly, on Jan. 6, 1992, the company ceased most operations.
 Since receiving the demand for payment from Yorktown, the company's board of directors has had a series of meetings to discuss whether any practical alternatives were available to the company. In addition, Interand's corporate counsel has reviewed the situation to determine whether any feasible defenses or counterclaims are available against the claims asserted by Yorktown. The board of directors concluded that, among other things, the pursuit of any potential defenses or counterclaims would require significant legal expenditures that the company was not in a position to support.
 Dr. Leonard Reiffel, a former member of the board, has asserted his opinion that the company has meritorious defenses and substantial counterclaims against Yorktown. At a meeting of the company's board of directors on Jan. 15, 1992, Reiffel, then a member of the board, placed a motion before the board to pursue these potential defenses and counterclaims. Reiffel was unable to provide the board of directors with any evidence to support the motion or with an attorney to further represent the company in any actions against Yorktown. Such a motion was not supported by the other board members, and thereupon, Reiffel tendered his immediate resignation from the board of directors. At the same meeting, the remaining board members, after determining that there were no feasible defenses to the claims being made by Yorktown, and that there were no practical alternatives available, made the decision to cooperate with Yorktown in the enforcement of its security interests. The company will be winding up its affairs over the course of the next few weeks.
 -0- 1/23/92
 /CONTACT: Barry Miller, VP-finance of Interand, 312-478-1700/
 (IRND) CO: Interand Corp. ST: Illinois IN: SU:


CK -- NY076 -- 2889 01/23/92 14:27 EST
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Jan 23, 1992
Words:779
Previous Article:BALTIMORE GAS AND ELECTRIC ANNOUNCES PUBLIC OFFERING OF COMMON STOCK
Next Article:COLOR SYSTEMS TECHNOLOGY INC. REPORTS PROFITABLE SECOND QUARTER


Related Articles
INTERAND REPORTS THIRD QUARTER RESULTS
DCR Assigns Investment-Grade Ratings to Argentina Bonds; $1.5B Credit Enhancement Provided by IBRD Partial Credit Guarantee.
FEI Member Tapped For Fed Post.
Swearing-in ceremony for Governors Bies and Olson. (Announcements).
Corporations called on to help solve accounting problems.
Preferential transfers not always legitimate.

Terms of use | Copyright © 2018 Farlex, Inc. | Feedback | For webmasters