- 39 -
be increased to 65 percent with a reduction to 61 percent
to be effective on August 31, 1983. The Wichita Bank
agreed to this change because the bank wanted to avoid a
potential default, and because it appeared unlikely that
petitioner would quickly recover from its recent financial
difficulties. Both petitioner and the Wichita Bank con-
templated that when the loans were considered for renewal
in February 1983, the maximum funded debt ratio for
August 31, 1983, would likely be reduced to 61 percent.
By August 1982, petitioner's financial personnel were
projecting a loss for fiscal year 1982 of $35 million,
compared to savings of $46.4 million which had been
projected when the budget was prepared. For fiscal 1983,
petitioner's financial personnel forecasted losses of $41
million through February 1983, and savings of $87 million
for March through August 1983.
At a September 10, 1982, meeting between petitioner's
representatives and officials of the Wichita Bank,
petitioner asked the Wichita Bank to consider changing the
current ratio requirement in its loan agreements from
1.20:1 to a flat amount of $75 million in working capital.
However, the Wichita Bank refused to consider any changes
in the current ratio requirement until petitioner made a
long-range evaluation of other debt-reducing possibilities,
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