8. Subordinated Convertible Debentures Payable

12 Months Ended

Dec. 31, 2017

Convertible Subordinated Debt [Abstract]

Subordinated Convertible Debentures Payable

Subordinated debentures payable consisted of:

	2017		2016
	($ in thousands)
6.5%, due June, 1991	$	447	$	447
6%, due May, 1992		8,025		8,025
	$	8,472	$	8,472

The Trustee of the 6.5% subordinated convertible debentures, which matured in June 1991, with an original face amount of $1,034,000, provided notice of a final distribution to holders of such debentures on September 2, 2014. In connection with such final distribution, the Trustee has maintained a debenture reserve fund with a balance of $41,000 as of December 31, 2017 and 2016, available for distribution to holders of such debentures who surrender their respective debenture certificates.

During the year ended December 31, 2017 and 2016, there were no 6.5% subordinated convertible debentures that were surrendered by their respective debenture holders and no funds were utilized from the debenture reserve account.

The 6.5% Subordinated convertible debenture balances are as follows:

	2017		2016
	($ in thousands)
Original face value	$	1,034	$	1,034
Outstanding debenture principal balance		447		447
Accrued and unpaid interest balance		846		817
Debenture reserve account balance		41		41

If and when such remaining debentures are surrendered to the Trustee, the applicable portion of such principal and accrued interest will be recorded as debt and interest forgiveness. As the Company has consistently stated in prior filings, the Company believes that any potential claims by the respective debenture holders on such 6.5% subordinated convertible debentures would be barred under the applicable statutes of limitations.

Since issuance, $650,000 and $152,000 of the 6.5% and 6% debentures, respectively, have been converted into common stock. This conversion feature is no longer in effect.

The Company is in default of certain sinking fund and interest payments on both subordinated convertible debentures totaling $8,472,000 in principal plus accrued and unpaid interest of $25,032,000 and $23,743,000 as of December 31, 2017 and 2016, respectively.

The debentures are not collateralized and are not subordinate to each other, but are subordinate to senior indebtedness ($1,198,000 at December 31, 2017 and 2016). Payment of dividends on the Company’s common stock is restricted under the terms of the two indentures pursuant to which the outstanding debentures are issued.

In order to maximize the amounts realized for the debt holders, the Company has been and intends to continue to seek buyers for the remaining landholdings.

No assurances are offered regarding the timing of or the values to be realized from future land sales.