6. Credit Agreements, Notes Payable, Subordinated and Convertible Debentures Payable

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Credit Agreements, Notes Payable, Subordinated and Convertible Debentures Payable

Credit agreements consisted of the following:

	September 30,		December 31,
	2020		2019
	($ in thousands)
Notes payable - $1,176,000 bearing
interest at prime plus 2%,
the remainder non-interest bearing,
all past due	$	1,198	$	1,198
Subordinated convertible debentures payable:
At 6.5% interest; due June 1991		-		138
At 6% interest; due May 1992		8,025		8,025
		8,025		8,163
	$	9,223	$	9,361

Accrued interest consisted of the following:

	September 30,		December 31,
	2020		2019
	($ in thousands)
Notes payable	$	3,435	$	3,385
Subordinated convertible debentures payable:
At 6.5% interest; due June 1991		-		279
At 6% interest; due May 1992		27,797		26,791
		27,797		27,070
Convertible debentures -related party:
Principal balance paid 6/23/16		52,790		52,915
	$	84,022	$	83,370

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 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 that was closed as of September 30, 2020. The balance as of December 31, 2019 was $13,000, available for final distribution of $92 per $1,000 in face amount to holders of such debentures who surrender their respective debenture certificates.

The remaining balance of the debenture reserve fund of $13,000 was disbursed in escheatment to the states of the respective debenture holders during the three month period ended September 30, 2020. The debentures with a face amount of $138,000 were effectively surrendered with the escheatment of the respective funds to the states of the debenture holders. Accordingly, the Company has recognized $125,000 in forgiveness of debt during the three month period ended September 30, 2020. In addition, accrued interest of $285,000 on such debentures that are considered surrendered was recorded as forgiveness of interest expense during the three month period ended September 30, 2020. There were no debentures surrendered or escheated in 2019.

The 6.5% subordinated convertible debenture balances for the nine months ended September 30, 2020 and year ended December 31, 2019 are as follows:

	September 30, 2020		December 31, 2019
	($ in thousands)
Outstanding debenture principal balance	$	-	$	138
Face value of debentures escheated		138		-
Debenture reserve account balance		-		13
Debenture reserve funds utilized
in escheatment to states of debenture holders		13		-
Forgiveness of debt		125		-
Forgiveness of interest		285		-

During the month ended September 30, 2020 the Company paid $125,000 of collateralized convertible debenture accrued interest to Love Investment Company (“LIC”), the Company’s primary preferred stock shareholder, and Love-1989 Florida Partners (“Love-1989”), also an affiliate of the Company, which held the collateralized convertible debentures.