It seems to be the reason they were found in default is on this paragraph:
"On April 6, 2016, the Company, the Company’s subsidiaries C Acquisition Corp., Accurel Systems International Corporation and IMX Acquisition Corp. (collectively, the “Guarantors”), DMRJ Group LLC (“DMRJ”) and Montsant Partners LLC (the “Assignee”) agreed to enter into an Omnibus Fourteenth Amendment to Credit Agreement and Sixteenth Amendment to Note and Warrant Purchase Agreement, effective as of March 30, 2016 (the “Fourteenth Amendment”), subject to certain conditions and post-closing effectiveness conditions, to extend the maturity date of the Company’s obligations to DMRJ and the Assignee and change other various elements of the Company’s credit arrangements with DMRJ and the Assignee, including the removal of the “blocker” provision that limits the conversion by DMRJ and the Assignee of their convertible secured promissory notes into common stock to 4.99% of the then issued and outstanding shares of the Company at any one time. However, despite the best efforts of the Company, DMRJ and the Assignee, certain post-closing effectiveness conditions to the Fourteenth Amendment with respect to the delivery of an opinion of counsel and payment of the fees and expenses of DMRJ and the Assignee were not satisfied, and the Fourteenth Amendment was, therefore, never deemed effective, resulting in the Company being in default of its obligations to DMRJ and the Assignee since March 31, 2016."
So because the 14th amendment never became effective they were in default since March 31. The question not answered above is when it was determined the 14th amendment did not become effective. It probably was known by May so in that case it should have been disclosed.
The paragraph above is taken out of the Zapata announcement when they finally disclosed this. They had to know sooner, and it should have been disclosed as soon as it was decided the 14th ammendment never became effective.
Clearly the May earnings call was highly misleading, around that time they appeared to be trying to arrange DIP financing for Chapter 11. That is mentioned in the court docs on the DIP financing!
Plenty of ammunition for the Equity Committee for the depositions!
