So SLR is now first mortgagee of the company. Just like when you buy a house, there can only be one first mortgagee and they always get first bite of the cherry. To stick with the house analogy, in a foreclosure the first mortgagee would take the house, sell it and then remaining funds would filter down to second or third mortgagees, unsecured creditors would not be entitled to anything from the sale, but if there is any money left after that it would go back to the mortgagor.
That being said, I'm not so sure that in the event of foreclosure SLR simply get to take the whole company, unless of course the value of the company's assets is less than it's debt. Whilst they have a lien over everything, they are only on the hook for $x. I'm not sure what kind of security, if any Appian have, but I would imagine they have something which would mean they would likely have their hand out after any sale.
That's a simplistic way of looking at it, the devil could be in the details. But there is no question, imo, it's a win-win for SLR.
SLR Price at posting:
$1.71 Sentiment: Buy Disclosure: Held
