Sunday, September 13, 2015 3:25:11 PM
As to the notes. This isn't brain surgery. Money was sent to DKTS for Mr. Pierce to use based on a "Use of Proceeds". I can not speak to the terms of the notes as I have not seen them. However, to be clear, a loan is a loan. Even though it is unsecured, it's a loan. He owes the debt holders the money. period.
If there was a signed agreement and consideration sent to DKTS for an intended use, not matter what was signed, it was clear that the intent was to borrow money and pay it back or to allow debt holders to convert to debt. so, in my opinion, there is no way that the notes will be considered "invalid" as you inquired.
It is more a question of the following: this is unsecured debt. there is/were no liens placed against any asset. However, there was a specific use of proceeds for the consideration given. Since that time, Mr. Pierce has moved 75% of the assets, both tangible and intangible, to another trading vehicle. It is safe to say that such asset values were enhanced or conceived with the money Pierce got from his lenders. So, the question that really should be asked, is whether given that this debt is unsecured and DKTS has no ability at this time to pay the debt or allow for conversions, does Pierce simply tell the Lenders to take a hike? Or does he risk being sued because the money was used for assets that he moved to another trading vehicle?
Either way the debt right now lies within the DKTS balance sheet.
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