I finally got a response from the Accredited bankruptcy hotline: 877-788-2813.
The plan is to liquidate the holdings of the REIT. After liquidation, anything left goes to the preferred share holders. Who knows if that is a few cents or a few dollars?
I have shares in both e trade and scottrade and have not been notified of any upcoming liquidation. I called e trade this morning when the price dropped to see if they had any information that they had not passed on yet. They found none. I also checked with them because I had a standing order to purchase 2000 shares at .51 and it did not fill this morning and when I looked I could not find a record of it. When I called them they finally found it and told me it had expired on June 30 even though it did not show up in my expired orders. They could not explain to me why it was not there.
Are you sure they specifically said that the Trust would be liquidated, or did they say American Home Lenders/Accredited would be liquidated? I am suspicious as to whether the bankruptcy information center even has any info on the status of the Mortgage Trust REIT since it is not included. If you used the company name, they were probably referring to the parent company and the operating company, both of which are in bankruptcy and I believe the operating company is technically a REIT. So if you just asked what will happen to the REIT, I suspect the responder was referring to the company itself. We, of course, have preferred shares of the mortgage trust, itself, which was created as a subsidiary of the operating company -- two levels down from the parent holding company. Bottom line, are you sure they were referring to liquidating the actual mortgage trust or just LEND (which I believe was a REIT, as well) and its parent/holding company, which are both in bankruptcy?
Yes I am sure that they were referring to the REIT. At first the only information that they could give me was that it was not part of the bankruptcy. Then a week latter they called me and said it was to be liquidated.
I included the number if you want to call and double check.
You are not out of the loop, per se. If you received a notice from the bankruptcy, you are already listed as a creditor. You can file a proof of claim when notified to do so, but as has been pointed out, we are only creditors because the parent company (in bankruptcy) guaranteed the Preferred shares and they would have to pay us if they had any assets left. It appears they will not have anything left after paying other creditors (we are last in line) so filing a proof of claim is likely a moot point. We have to wait to see what we get from the REIT itself if it is liquidated.
The REIT is not included in the bankruptcy. It is simply going to be liquidated. Accredited is the guaranteer of the REIT, which mean since they are bankrupt that we have no guarantee.
The various trusts the REIT owns are going to be dissolved with the first lien holders in each trust getting made whole first. Then and only then, if there is anything left over, it flows to us. Also any dividends or other payments that the trusts have already paid to the REIT are ours along with any other cash on hand.
Could be pennies, could be much more. But with the total lack of transparency there is no way to know.
If I am out of the loop I wonder why I even got the notice of bankruptcy? Are you saying we are safe from this unless we are informed at a later date that we have become involved because we were listed as a asset? Is there any chance the letter was so that we would go to the meeting and sign up as creditors or have someone do it in our name. If the REIT is listed as a asset will the trusties of the REIT see to it that us investors names are placed on the creditors list?
The meeting of the creditors is just a formality. Nothing happens other than adding ones name to the list of creditors. Now there is a series of omnibus meeting scheduled:
None of this has much of an effect on the REIT however. It's a separate issue. The only real information we could possibly get out of the bankruptcy is if they list the REIT as an asset and assign it a value. Other than that, we are out of the loop.
The longer it takes, the better.
There was substantial common equity as of the FY 2007. If there's a dollar of equity in the till as of the end of the wind up, we should be entitled to $25+ accrued dividends.
We know that LS injected equity capital into the REIT subsequent to their purchase of Accredited. What we don't know is whether the are also creditors of the REIT. My fear is that the wind-down is some sort of scheme to extract their interest as creditors while screwing pfd shareholders.
More likely than not, they just made a bad investment in buying Accredited (we all know they tried valiantly to pull out of the deal). The REIT issue may be a very small side issue for them at this point. And, perhaps to our benefit, they will be resolved under the purview of a BK court.
It's a longshot but this thing could end up paying out much more than the shares reflect today.