Not paying interest was strategic in nature. This won’t be a chapter 7 with insulin glargine to be realized over next couple years. No need for ch 11 either if they can successfully negotiate with key creditors. One option discussed which was a debt to common equity conversion, which would significantly dilute current shareholders. Either way, Lannett will be around for many years to come. I just wouldn’t buy their stock right now. :)
When you have to bower money to pay for money, that's a problem, at this level, everybody knows., I'm sure they will pay off Elite first before they go down under, if it wasn't for Elite they would not be green for cash.
Lannett is fine, here will be no BK and Elite will get all that it is due.
The article clearly states the decision not to pay was not driven by financial constraints. One should not refer to 47million in cash as an 'only', in fact they put it forward as proof Lannett was not having liquidity issues.
Lannett decide to enter the 30 day grace period on the loan as part of an effort to " evaluate options to strengthen and restructure our balance sheet". The convertible loan has a built in clause (as do most convertible's...and as described in the article) to handle when this occurs.
Lannett is probably holding off paying the interest payment as they weigh wether to pay off the convertible to get out from under it.