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Subsequent Events
9 Months Ended
Sep. 30, 2019
Subsequent Events [Abstract]  
Subsequent Events

In October and November 2019, the Company, agent bank and the Credit Facility Lenders entered into the Forbearance Agreement and an amendment extending the Forbearance Agreement with respect to the Specified Defaults. The Forbearance Agreement provides that the Credit Facility Lenders temporarily forbear from exercising default remedies under the Credit Facility for the Specified Defaults under the Credit Facility and reduce the maximum availability under the Credit Facility to $115 million. The Forbearance Agreement will be in effect until December 12, 2019, unless defaults other than Specified Defaults occur under (i) the Credit Facility, (ii) any term loan indebtedness of the Company’s special purpose subsidiaries, or (iii) the Forbearance Agreement. The Forbearance Agreement allows the Company to continue to use LIBOR as its benchmark interest rate, but increases the margin on the Company’s LIBOR-based loans under the Credit Facility from a maximum of 3.75% to 6.00%. The Company also paid a fee of $181,250 on October 28, 2019 and will pay an additional $225,000 no later than the Forbearance Expiration Date.

 

During the forbearance period under the Forbearance Agreement, the Company intends to formulate a Workout Plan to address its noncompliance with its Credit Facility covenants and negotiate a longer term amendment with its existing Credit Facility Lenders to address covenant compliance in the Credit Facility agreement. The Company has engaged an investment banking advisor to assist in formulating the Workout Plan and analyzing various strategic financial alternatives to address its capital structure, including strategic and financing alternatives to restructure its indebtedness and other contractual obligations.

 

In early October 2019, the Company determined that it was no longer probable that forecasted cash flows for the Credit Facility Rate Swaps with a nominal value of $50 million would occur as scheduled as a result of the Company’s defaults under such facility, and the Company therefore was required to dedesignate those swaps. To the extent the Company determines the forecasted interest payments are still reasonably possible, amounts previously recognized in accumulated other comprehensive income will remain there until the forecasted cash flows impact earnings. If it is determined that it is probable the hedged variable cash flows will not occur, the associated amount in accumulated other comprehensive income will be recognized immediately in earnings as an expense. The Company has commenced negotiations with the Credit Facility Lenders regarding a restructuring of the hedged variable debt, but has not yet determined which, if any, amounts of forecasted cash flow will probably not occur, and therefore has not yet determined whether any, or how much, of the accumulated other comprehensive income will be recognized in connection with such restructuring.