Jerry Knight's column in yesterday's Business section commented on Woodward & Lothrop's announcement that it would buy back, on a discounted basis, junk bonds it sold in 1985. The column compared the buyback to a customer who charges items at a department store with no intention of paying and who then presses the store to agree to accept less than is owed because the customer might have trouble paying the bill.
The analogy does not apply because, as the column acknowledged elsewhere, the company confirmed that it has made its 14.75 percent interest payments to date, remains committed to paying off the bonds on schedule in 1995, and has not tried to pressure or discourage the bondholders. The company is prepared to continue its payments if bondholders do not choose to sell the bonds.
The column did not mean to suggest that the company has failed to meet its financial or disclosure obligations or has taken measures to depress the bonds' value. As the column noted, the problems of other retail companies and of junk bonds generally have led to a drop in bond prices. The discounted value of the company's bonds was not induced by the company, but rather preceded its offer to buy them back.