Image Defaults on Loan Payment, Could File for Bankruptcy15 Dec, 2009 By: Erik Gruenwedel
Image Entertainment Dec. 15 said it did not make a $4 million payment on a senior secured note due Dec. 14, putting the Chatsworth, Calif.-based distributor at risk of filing for Chapter 11 bankruptcy protection.
Image said it does not have the funds, or access to the funds, necessary to repay all of its outstanding obligations to lenders Wachovia and disc replication firm Arvato Digital Services, among others.
The distributor, earlier this month, had requested a three-day payment extension from Dec. 11 with the lenders on the 8.875% note with a principal amount of $15.7 million.
The company, which must now pay the default interest rate of 12% and pay a late charge in an amount equal to 15% interest on the installment, said it is continuing to work with its financial advisor to explore strategic alternatives.
Image reported a loss of more than $1.6 million in the most recent financial period on revenue of nearly $30 million, a steeper slide than the net loss of $465,000 it reported during the same period in 2008.