Discovery Zone Defaults on Loans: Discovery Zone...

Discovery Zone Defaults on Loans: Discovery Zone Inc. said this week that it has defaulted on certain borrowing agreements. The company said it would have defaulted in June but that its lenders had granted it an extension until this month. The default gives banks the right to demand immediate payment on their loans and to terminate any additional lending. The Ft. Lauderdale, Fla.-based operator of indoor child play centers warned that the default would have a “material adverse effect on the company’s financial condition.” Discovery Zone said it is negotiating with its lenders to arrange new financing and waive the default.