Has anyone seen one of these yet?
Baby Doc say they had to distribute a prospectus
before the dividend could be paper?
reached the drop dead date for getting a prospectus out
and declaring a year end deadline?
If we are
not getting a prospectus, it seems to me that
eliminates certain possibilities, one of those being a paper
Whatcha think crew?
My recollection of the August conference call in
which this was discussed was that the REIT rules
require PZN to give shareholders a choice of paper, and
that essentially PZN will have to put out a proxy
statement with disclosure about the different securities.
It was for that reason, Baby Doc said, that any
decision about paper vs. cash would have to be made well
before year-end; I seem to remember him saying that
shareholders would have to be solicited beginning with a
filing in November to have enough time to get everything
I agree with your collective recollections. I
wonder if "the answer" is that management needed to
distribute a proxy if there was to be a choice but now we've
essentially been told that the Special Dividend has mostly
been paid (we thought it was the common dividend)
already. I would assume that the balance of the Special
(whatever that amount is?) will need to be paid in cash
this year since it's too late for a proxy. However,
this would seem to be in conflict with the credit line
covenants, which required a SI if the special is to be paid
I wonder if that's why Lehman left.
Doc told them of his plan (the Special has mostly
already been paid) and they told him he couldn't do that
because it's a violation of the covenants of the loc THEY
led. I'll bet Lehman had no choice but to quit.
Interesting scenario, but I don't know what it portends for
It seems a bit surprising that
we've not heard anything from the banking group.
Normally, the group would advise the client that they are
outside the covenants and that information, being
material, must be divulged to shareholders...unless PZN is
hiding behind "a quiet period".
Isn't an 8-K rquired to be filed with the SEC for
major financial changes? Or is 10Q disclosure
The company has confessed that its major tenant
cannot meet its lease obligations without raising some
money (as reported in the 10Q). Similarly, the company
obviously is in danger of not meeting the requirements for
being a REIT as of the end of 1999. If there is any
plan at all to de-REIT, it seems that it would have to
be disclosed in an 8-K.
Since we don't have
an 8-K saying that, can we then assume that they
WILL meet the requirements by 12-31-99 (i.e. the SI is
about to be announced)?
According to many posts here, there is nothing to
worry about because the co. is worth $20 or above on
the paper and in their minds.
They somehow forgot
to remember leson 101 of investing: that is a co is
only worth what someone will pay for. Like everything
So following on that trend, assuming they are right,
they all must be selling the farm and invest in PZN
right now, like "prisonanalyser". Am I
After all I figure that from $7 to $20 in 10 months is
potential to get rich if you put enough money into
By the way you'll get my shares soon and I ll leave
covered in blood but not dead (that is for those who do
not see the knife coming).
I am just staying
at this point because $7 will hold another week and
by then who knows a dead cat bounce of a point or
two if dividends get paid may remove some blood. And
to be honest I am really curious about how they'll
cough up the "dividends"
Faith is a beautiful
but sometimes a deadly thing for those who
And by the way where is cleo who has such eloquent
discussions about the GREAT REIT?? She probable bailed whiel
the others who bought the arguments, like me, have
bled to death. Many who appears to have good
intentions here have been mislead by PZN management and some
still are doing their dirty work may be
WAKE UP PEOPLE THAT THING IS GOING TO $7 !!! Stop
getting excited if it goes up 1/2 point.
It's easy to get rattled with the beating we're
taking, but I don't think you can have it both
Either PZN is fundamentally sound and Crants has done a
miserable job of convincing the Street, or something awful
is on the way and the Street is correct in
anticipating it. Personally, I choose the former.
Remembering Ben Graham's dictum that the market is a voting
machine in the short run but a weighing machine in the
long run, I can't wait to see what PZN really weighs!
Doesn't matter what they call it, it looks like
they have to pay about $335 million in dividends this
year and so far they have paid about $212 million.
That leaves about $123 million to be paid or declared
in the next 3 weeks.
I think that your numbers are off the mark,
at this point paranoia has taken over the board. The
dividend announcement should be the 15th of this
If the BOD get their act together we should know
next week. The quiet period and all the legal action
is having a very negative effect.
It's hard to
believe that any company could get this screwed up
without help from thier financial advisers. The advisors
that set up this fiasco should be held accountable.
The fees were in the millions and shareholder should
seek compensation from the so called experts..Merrill
Lynch had to pay back millions to Orange county for
I don't know who set up, and approved
this arrangment PZN/OPCO but its unbelievable that
they could miss so many points.
Maybe OPCO should
apply for Federal assistance to pay the rent...
looks like alcohol and lipstick on PZN .
Regarding comment: 3) EPS "games" can be played
between OPCO and PZN for Q4 (to reduce PZN's Q4 EPS).
This can be generally true under GAAP or financial
accounting, especially if it is downward as GAAP in very
conservative. But, you are dealing with TAX, and the IRS is
very aggressive in ensuring earnings are stated at the
highest levels. I believe FFO is referenced as a
guideline and may be used for dividends, but the underlying
requirements are based on TAXABLE Income.
In the past I've been able to get reasonably
reliable info regarding PZN from credible sources. Not
this time. The silence is deafening. Give the recent
price action one would have to bet that the news is not
likely to be great but who the heck knows? One thing I
have learned is that an announcement will be made in
the next 2-3 business days on the SI situation and
that PZN has a few proposals on the table. The Bureau
of Prisons contract decision will be announced
within the next 30 days.
It has been debated on
this board whether PZN needs an SI but I don't think
there is any option. PZN has about $100MM left on its
credit line and is rapidly burning cash. PZN and CCA
need a a lot more than $100MM and $25MM, respectively
and yet the dilution could be nasty. I know that I
very much underestimated the operating leverage
inherent in PZN/CCAs structure. PZN has gone on a building
rampage over the last 12-18 months and yet its occupancy
has fallen to the low 90s. It's clear that PZN/CCA
need occupancy as close to 100% as possible to support
its cost structure and feed its debt load. Building
spec prisons like Cal City and then watching them sit
empty is a killer. That's why the BOP contract (for
more than 3,000 beds) is critical and makes you wonder
how an SI could move forward without knowing the
outcome of that award. As far as the bank credit
agreement is concerned, PZN is not in violation of any
covenants while for CCA I'm not really sure but if they are
we will hear about it shortly. I really think that
for PZN to survive and prosper they need to announce
a big equity infusion to enable them time to boost
occupancy and get the cash flow up to its full potential.
If PZN has to pay the special in paper and then
loses the BOP contract I don't see how they will have
the cash flow to sustain themselves and fear the
stock will head much lower still. De-reiting is still
possible and may make sense in the long term but will lead
to huge selling by yield investors in the short
term. Wow, I never would have believed it would get