They won't cut the dividend simply because the yield is too high.
They would cut it because they think they cannot afford to pay out $60Mill/qtr. And the only way they would admit to that would be if they are anticipating a prolonged period of losses, or they can't pay off the current portion of the debt ($360Mill) AND pay the dividend.
Bottomline: if their earnings prospects have deteriorated so severely that they cannot afford the dividend (after generating about $1Bill in cash over the previous year), then the stock will go to zero because of that, not the dividend being modified.
And I would never be able to understand how the BOD would allow Watkins to keep his job - even though he runs the BOD. Talk about lack of oversight and fiduciary responsibility. Sue them all.