Many of AMD's debt obligations have financial conditions that must be met. At some level of low cash -- $500 million perhaps -- the conditions will be activated and the creditors can then accelerate the repayment terms. If this happens, it will not be possible for AMD to pay its bills and they are in deep trouble.
Another possibility is that at about $500 million cash, AMD will have trouble making payments for its operating expenses and debt payments.
The condition for bankruptcy of a company is an inability to pay debts as they come due. At that point, the company can declare bankptcy like United Airlines did or its creditors may force AMD into bankruptcy. In my view it's more likely for the creditors to take this action than AMD so that the large creditors can protect their security interests.
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