Now with a virtual "stop sell" in place, they are no longer able to offer those interest only loans. And with the lawsuits and legal issues pending for YTB, I am pretty sure there are few (if any) banks that will take on the risk of loaning them money.
As the Dispatch pointed out, YTB has about $600K in cash (as of June 30) and with $25M earmarked to California, $100M earmarked to the one class action suit, and just operating expenses, that $300M is practically gone--and legal expenses for defense (which I believe are non recoverable even if they prevail) are not even included.
Some interesting points from the Dispatch article also seem to emphasize my point about YTB being reactionary and operating on the illegal side of the line till caught:
- In January, three weeks before state regulators finished their report on Meridian, YTB paid back $500,000 of that loan.
- Then, in July, after the FDIC's order was issued, YTB refinanced the remaining $2 million balance at a higher interest rate and began making regular monthly payments.
So what will become of YTB if they are not able to access their credit with Meridian any more?
ReplyDeleteCan you say Chapter 11? Maybe Chapter 7?
ReplyDelete