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York defaults on $150 mln bonds, says creditors considering bankruptcy
New York, Oct. 30 - York Research Corp. said it will not make the $10.345 million payment due Tuesday on the $150 million of 12% senior secured bonds maturing Oct. 30, 2007 issued by York Power Funding (Cayman) Ltd., which will put it in default when the grace period expires on Nov. 9.
When the default occurs, York said the trustee will be able to take remedies against the collateral for the bonds. The collateral is York's interest in its Trinidad Project, Big Spring Project, Brooklyn Navy Yard Project and Warbasse Project.
The New York-based developer of cogeneration and renewable energy projects also said that the provisions of the bonds have been violated because $17.5 million generated by the Trinidad Project over the last 18 months was advanced to York for its general corporate purposes.
Because of this, York also said that its chairman, president and chief executive officer Robert M. Beningson will no longer be serving in those positions and will be taking an unpaid leave of absence.
Robert C. Paladino, formerly York's executive vice president, will be president and chief executive officer.
York also said that its negotiations with the creditors of NAEC alleging claims against York have not been fruitful, and the creditors are now deciding whether to file a bankruptcy petition against York.
Separately, York announced that it had signed an agreement with a subsidiary of NRG Energy, Inc. to sell its Trinidad Project for $140 million.
The transaction is subject to various conditions, including the consent of the Trinidad and Tobago Electricity Commission and the discharge of the liens of the 12% senior secured bonds.
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