Troubled Classic Communications Inc. has missed another interest payment on
its bond debt and, as a result, it could be forced to file for Chapter 11
In a filing with the Securities and Exchange Commission, Classic said it had
failed to make a $7.2 million interest payment due Aug. 1 for its 9.375 percent
senior subordinated notes due 2009 and its 9.875 percent senior notes due
Because Classic did not make that payment by Aug. 31, the company said, it
was prohibited from making another $11.8 million interest payment due Sept. 4 on
its 10.5 percent senior subordinated notes due 2010.
The MSO estimated that $153 million of the notes are outstanding.
Classic said in the filing that it is negotiating with its lenders and it has
retained Credit Suisse First Boston to seek alternative financing. However, the
company said that by defaulting on the interest payments, its bondholders could
request that the debt be paid in full immediately.
'In the event a consensual restructuring of the company's debt is not
achieved and any of the company's outstanding senior or subordinated debt were
to be declared immediately due and payable, the company would not be able to pay
such amounts and would likely seek to reorganize under the provisions of the
federal bankruptcy laws,' Classic said in the filing.