JNC Sues Aura Systems Over Loan Payments

Aura Systems Inc. was sued by JNC Opportunity Fund Ltd., a Bermuda-based investment company that holds a convertible debenture issued by the audio speaker maker, for $3.5 million in unpaid loan payments. Aura acknowledged being in default on the June 1997 loan in a new loan agreement signed last November and attached to the lawsuit. At that time, new payment terms were negotiated. The suit, filed in U.S. District Court in Wilmington, Del., alleges that the new terms required five monthly payments of $1.1 million beginning in November. It also calls for 15% interest on all late payments. JNC claims that the first and second payments were late, the second payment was less than the agreement called for, and the final three payments were never made. Steven Veen, Aura’s chief financial officer, wasn’t immediately available for comment. Shares of El Segundo-based Aura fell 9 cents to close at $1.09 on Nasdaq.