Intermark Fails to Make $9.1-Million Payment

Intermark, a troubled La Jolla holding company, said Monday that its Triton Group Ltd. subsidiary missed a semi-annual interest payment of $9.1 million that was due June 1 on $125 million in bond debt.

Drowning in junk bond debt and hit by declining values of its assets, Intermark said in March it would attempt to negotiate a prepackaged reorganization plan with bondholders that would enable it to file this month for protection under federal bankruptcy laws.

Bondholders must approve the plan because it would involve an exchange offer by which they would receive an average 40 cents in equity in the surviving entity for each $1 face value of debt they hold. Intermark said it was the best way to salvage some value for investors, since the $210 million in bond principal that Intermark owes overwhelms the $100 million in asset value.

Intermark said in March that it had a true net worth of minus $111 million.

An agreement with bondholders has not yet been reached, but President John Stiska said Monday that the company is in “substantive negotiations” with bondholders. Intermark will commence “solicitation of (the exchange offer) as soon as those negotiations are completed and regulatory approvals are obtained,” the company said in a statement.

Stiska said that last year Triton missed the June 1 bond payment as well but paid it before June 30 and avoided default.