Key3Media Group, the organizer of the Comdex trade show, failed to make a scheduled interest payment on a bank loan and then defaulted on the loan in late December, according to a filing the company made with the U.S. Securities and Exchange Commission (SEC) last Friday.
The Boston company said on Dec. 17 that it failed to make a scheduled semi-annual payment on senior subordinated notes and that it had 30 days to make the payment before going into default on the loan, according to an SEC filing. However the company did not have to wait one month for default to be declared on its loan.
Three days later Japan's Softbank Holdings Inc. and its U.S. unit, Softbank America Inc., sold their total stake in the company to Triax Holdings Ltd. for US$1. As part of the contract, Bahamas-registered Triax agreed not to sell the 36.7 million shares for one year. The transaction left Triax with 53.5 percent of Key3Media common stock which meant a change in control of the company and thus a default on its bank loan, according to an SEC filing.
On Dec. 19, one day before Softbank sold its shares to Triax, Eric Hippeau resigned as a director of Key3Media, according to an SEC filing of Dec. 23.. He gave no reason for the resignation although he also serves as president of Softbank International Ventures.
In November as Comdex Fall 2002 was beginning in Las Vegas, a Key3Media spokesperson said the company was about $300 million in debt.
In addition to Comdex events around the world, Key3Media organizes a number of other trade shows including Networld Interop, Seybold Seminars and JavaOne.