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Getty offers payment to debt holders in exchange for calling off default notices
On January 4th, 2007 Getty sent a letter to all holders of its $265MM in Debentures expiring 2023, offering a payment of $5.00 for every $1,000 of debt in exchange for a waiver of the default status some debenture holders claim Getty has created by not filing its Form 10Q (3rd quarter earnings report) on time with the SEC. The offer stands only as long as a majority of the debt-holders agree to it by January 17th, 2007. Interestingly, the request for the waiver of default also covers any future possible default caused by Getty filing its year-end 10K report late as well. It gives Getty until May 1, 2007 to file the 10Q for 2006. Assuming 100% of the debt-holders agree to the waiver of default, Getty would owe $1,325,000 on or immediately after May 1st, a sum Getty can easily cover.
The filing delay at issue springs from an SEC investigation into possible share options back-dating at the company. On November 9, 2006, Getty announced it would delay filing its 3rd quarter Form 10Q pending the outcome of that investigation and an internal company investigation into the matter. At the same time, Getty disputes the claim that the terms of the debentures, in fact, stipulate that the company is automatically in default if it files its reports tom the SEC late. It appears, however, that the company has decided that getting out from under the threat of the default and the cloud the default notices create is worth the $1.325MM. Wall Street appears to take comfort in the move. On January 4th, the day of the announcement of the waiver request, the stock closed at $43.41. It closed at $43.67 on January 8.
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Related Stories:
Getty reports receiving default notices (December 4, 2006)
Getty Images delays 10-Q filing while committee investigates stock option grants (November 13, 2006)
Posted in: News, Stock Photo Companies
