"and I dont give credit for wiping out debt!"
What was done was an accounting move. When you write off "bad debt", it reduces your current assets and lowers your profitability for the quarter. They have been taking $100k for the last 4 quarters ($200k on the latest Q). Derdre took the whole thing in the 4th quarter of the K. Why was this a good move? The K wasn't good financially anyway. It was better to take the loss during the last quarter than take $100k or $200k shots in the future and have to live with it for the entire year or beyond.
As for the actual debt, it isn't technically gone forever. IBCL can still go after that debt. If they manage to collect the debt, it wont show up as an increase in profit, but it will show up as an increase in cash. Now, we all assume that it is Megastar that isn't paying. The company could have worked out a "new deal" and as such eliminated the remaining debt, or they could have just wrote off the debt cause Megastar is just a slow payer. If it is the latter and they pay say 180 days out, old debt can be paid and recorded as current debt and it will give the illusion and benefit of someone paying on time. Eventually - if everything is paid, the write off will be realized - even after the 8 year contract ends.
Ty is the first loser.
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