Imaging center chain U.S. Diagnostic has failed to pay the $10 million principal amount of its convertible notes that matured on June 30. As a result, the West Palm Beach, FL-based firm is in default under these notes.
This default may also constitute a cross default under the company's other debt instruments, which could entitle the holders of these other instruments to accelerate their maturity, according to USDL. As previously announced, USDL is seeking to restructure its indebtedness, and is currently in negotiations with its secured and unsecured lenders.
If USDL is unsuccessful in this restructuring attempt, or can't sell additional imaging centers or otherwise obtain liquidity in the short term, the company said the lack of working capital and the inability to incur additional debt will have a material adverse effect on its ability to maintain its operations. A reorganization under U.S. bankruptcy laws is also a possibility.
By AuntMinnie.com staff writers
July 5, 2001
Related Reading
U.S. Diagnostic posts first-quarter loss, May 21, 2001
USDL suspends merger talks with IRG, March 2, 2001
USDL to merge with International Radiology Group, January 17, 2001
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