Merisel Inc, the El Segundo, California computer distributor which enraged its long suffering debenture holders with an alleged behind the scenes deal, has subsequently failed to pacify the angry group and may forfeit $48m, pushing the company close to bankruptcy once more. Merisel did a deal in April with holders of $125m of its 12.5% notes, proposing to swap 80% ownership in exchange for retirement of the debt. But before the deal was sealed, a better offer was received from external investment firm Stonington Partners, stirring up a lawsuit from the jilted noteholders and causing the directors a real headache, as they felt duty bound to recommend the new offer to shareholders (CI No 3,213). Discussions have continued between the company and a committee representing the noteholders, but things have not progressed well, and a shareholder meeting to vote on decisions facing the company has been postponed from 29th August to 18th September. This postponement breaks Merisel’s agreement with its 12.5% noteholders, who will be entitled to claim the interest payments formerly waived in the original deal. Merisel fears the worst and has put together cash of $48m in case its noteholders turn nasty. As of June 30th, the company’s cash reserves were just $48.5m. Discussions are continuing.
