Are these cumulative?
We're the preferred holders asked to do a tender in at 15 cents on the dollar. If so then the ones trading are the ones that were not tendered in but essentially the value is capped at just that $3.75 ( $25x .15)?
If You might know, kindly clarify.
the preferreds still have a par value of $25 and a dividentd must be paid to them before common sees a dime. As of now they are not cumulative, but there is a pending lawsuit to restore all original prospectus feature to the preferreds. right now the preferreds are worth more than the company. we will see how it turns out, but the company will have to deal with their existence, if try to recapitalize or sell. The balance sheet has a huge entry reserving the cumulative dividend so the company must not be all that confident of the legal outcome.
you need to do your due diligence. Greater than 2/3 of the class of both preferreds voted to change the indenture and at same time sell preferreds to company. Therefore the preferreds trading now have had the indenture change, so the preferreds
outstanding are completely worthless outside of liquidation.
1. the company can pay common dividends without paying preferred dividends
2. the preferreds are non cumulative
3. no amount of unpaid dividends leads to voting rights or board appointment rights.
4. the company can merger or be aquired without triggering preferred rights.
Only in a liquidation do preferreds have seniority to common