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Corrections Corporation of America Message Board

  • ewocfo ewocfo Dec 8, 1999 4:31 PM Flag

    Prospectus

    Has anyone seen one of these yet?

    Didnt
    Baby Doc say they had to distribute a prospectus
    before the dividend could be paper?

    Have we
    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
    dividend.

    Whatcha think crew?

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • These guys need to be put in their own prisons!!! Where's Gordon Gecko when you need him?!!!!

      • 1 Reply to stevemyrlin
      • 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
        else.

        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
        right??

        After all I figure that from $7 to $20 in 10 months is
        potential to get rich if you put enough money into
        it.

        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
        beleive.

        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
        unwillingly.

        WAKE UP PEOPLE THAT THING IS GOING TO $7 !!! Stop
        getting excited if it goes up 1/2 point.

    • 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
      done.

      • 2 Replies to bettyboro
      • Isn't an 8-K rquired to be filed with the SEC for
        major financial changes? Or is 10Q disclosure
        sufficient?

        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)?

      • 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
        in cash.

        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
        the future.

        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".

    • Eternal Quiet Period, anything is
      possible.

      Somebody was saying earlier today that a vote would be
      required to de-REIT. Remember, right now, legally, PZN is
      still a C-corp until the IRS signs off on their having
      met the requirements to be a REIT. No IRS approval,
      no REIT. I'm sure, as in most matters relating to
      taxation, that the requirements are pretty complicated, but
      if they don't pay the rest of the special by
      December 31, it's a no brainer - they aren't a REIT. Here
      we are on December 8th, 23 days to go until
      year-end, with the board apparently not having approved any
      dividend yet.

      Sure, they'd get sued. But the
      lawyers from this set of lawsuits would probably have to
      get in line behind the previous two sets of lawyers.
      And, who knows, since there's always some investment
      bankers in Nashville working on something, maybe Doc can
      convince the judge that since they are in a quiet period,
      then giving depositions would be in violation of SEC
      rules. Forever.

      Seriously, maybe RP's scenerio is
      correct. Maybe they don't plan to get a SI, and they sure
      don't want to break their covenants, so they can just
      throw up their hands and their defense of the de-REIT
      lawsuits would be "We had no choice - the banks wouldn't
      let us pay cash, and we rejected all the potential
      SI's so as to defend our precious shareholders from
      massive dilution."

      I have learned one useful thing
      from this. Next time I come home from work late with
      alcohol on my breath, I'll just tell my wife that I was
      working with an investment banker on something, and
      sorry, honey, but I'm in a Quiet Period.

    • I think that your numbers are off the mark,
      but
      at this point paranoia has taken over the board. The
      dividend announcement should be the 15th of this
      month.
      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
      poor advise.
      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...
      It
      looks like alcohol and lipstick on PZN .

    • This is from the last quarterly report:
      The
      Company, as a REIT, cannot complete any taxable year with
      accumulated
      earnings and profits from a taxable corporation.
      Accordingly, the Company is
      required to distribute the
      Accumulated Earnings and Profits to which it
      succeeded in
      the Merger. The amount of the Accumulated Earnings
      and Profits is
      currently estimated at $235.0
      million. All dividends paid by the Company thus
      far in
      1999 have reduced the amount of the Accumulated
      Earnings and Profits.
      Thus, to satisfy the requirements
      relating to the distribution of the
      Accumulated
      Earnings and Profits, the Company must still distribute in
      1999 the
      amount of the Accumulated Earnings and
      Profits, minus the dividends paid thus
      far in 1999. In
      addition to distributing the Accumulated Earnings and
      Profits,
      the Company is also required to distribute 95% of its
      taxable income for 1999.
      The Company currently intends
      to pay sufficient dividends (in cash
      or
      securities) to satisfy all distribution requirements for
      qualification as a REIT
      for 1999. The Company is currently
      considering the exact timing and method of
      the payment of
      these required distributions. The Company may partially
      satisfy
      these requirements through the payment of the Special
      Dividend. Certain
      provisions of the Amended Credit
      Facility restrict the Company's ability to pay
      these
      required distributions in cash in 1999, as previously
      described. Merrill
      Lynch has been retained by each of the
      Company and New CCA as its financial
      advisor to
      assist each company in raising the capital required by
      the Amended
      Credit Facility in order to make the
      Special Dividend payment in cash, also as
      previously
      described. There can be no assurance that the Company or New
      CCA
      will be able to raise the capital required
      under the Amended Credit Facility
      for the Company
      to pay the Special Dividend in cash or, in the event
      such
      transaction is completed, that the Special
      Dividend will be paid in cash.

    • <In addition to distributing the Accumulated
      Earnings and Profits, the Company is also required to
      distribute 95% of its taxable income for 1999. The Company
      currently intends to pay sufficient dividends (in cash
      or
      securities) to satisfy all distribution requirements for
      qualification as a REIT for 1999. The Company is currently
      considering the exact timing and method of the payment of
      these required distributions>

      Lets highlight
      the last part

      <The Company is currently
      considering the exact timing and method of the payment of
      these required distributions>

      Back to my
      original question. What is the exact time frame these must
      be paid?

    • That's a good question the answer to which I
      don't know. I suspect you are right in stating that the
      dividend must be declared before the end of this month and
      paid before the end of January 2000.

      cb

    • They now have to pay whatever is required as
      regular REIT dividend to qualify as REIT.

    • Tax loss selling is killing REITS.

      The underlying business is worth more than
      $18 in my opinion.

    • 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.

      cb

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