At 5 PM CST Today, Solo Will Know The Size Of the Impairment Charge, On Its Former HQ

It is only a theoretical possibility that there will not be an impairment charge of fairly large size now, in my personal opinion.

The only real question is whether the size of the impairment charge will mean that Solo Cup will be in violation of its 1.1 to 1 coverage ratio covenant, in its debt facilities -- as of the end of the first quarter, 2012. That quarter will end March 30, 2012.

A series of cascading events are triggered, if Solo is below 1.1 to 1 on debt service coverage.

The most likely outcome would be a waiver, or a consent -- along with a consent fee, of course -- paid to the lenders. I suppose it is possible that the lenders could call a full-on default, and when matured, seek an acceleration of the maturity of all the debt. But that seems remote.

We will report any news out of the auction's close this evening. If you happen to be there, feel free to leave a comment -- I promise we will run your take on it, tomorrow as a new item -- as an "on-scene" citizen reporter.