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La Quinta Properties Inc. (LQI) Message Board

  • NoMahu NoMahu Oct 28, 1998 9:32 PM Flag

    Tax treatment of loss on Santa Anita sal

    If MT takes the huge loss on Santa Anita as reported by the LA Times, will MT's dividends be tax free for awhile?

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    • The buy out of SAR was like the invasion of the
      bay of Pigs. There are too many strings attached and
      too many strange actions that followed. Ask yourself
      this. Was buying LQI a forced deal in order to get SAR
      ? Not all gangsters have Italian names. There is
      crime in all levels of Govt. and Wall Street.
      Have
      a nice day.
      PS/ Drop in at my resturant in
      Chicago.

    • A very interesting question,possibly for the
      SEC:

      Who owned or benefited from short sale of 8 million
      shares
      in July?

      Were they in a direct or indirect
      fiduciary relationship
      with the parties to the various
      mergers and acquisitions?

    • Ask any of their 15000 brokers. They have little
      enough to do with all the competition from discount
      brokers cutting into their trades. What they have to tell
      you might not be unbiased, but they still are in the
      drivers seat. GOOOOO Merrill Lynch

    • for MT located? Especially, the technical
      information that is readily available to you and to no other
      MT investor?
      Everywhere I look, the data is N/A,
      MT IR provides no information, and there is no tech
      analysis to be found anywhere.
      If your last post is an
      infrequent serious one, on a scale of 1 to 10, with 10 the
      high point of seriousness, you get a rating of about
      3.
      eom

    • They had said that sometime in the last week of
      September or first week in October they would be announcing
      a new ceo and how they would deal with the paired
      reit status. Nothing happened. Then they said toward
      the last of October they would have some kind of
      announcment and still nothing. Is there any kind of time
      limit on announcing a new ceo and how they plan to deal
      with the paired reit question or can they can they
      keep this up indefinitely.Do you think where the short
      stock price goes will dictate what they plan to
      announce in the future? I would think they have only three
      options.(1) Stay a paired reit (2) Corporation (3) Spin off
      into separate companies.If they sell SAR and all of
      SAR's assests they lose the paired status,right?

    • Asset Sales = new investment capital = increased FFO = increased dividends.In for long term.Good luck, frichard.

    • You might find it helpful to look at SEC case law
      involving claims for fraud on the market.

    • Thank you very much for all your technical input.
      As you know I am seldom serious but from all the
      posters and all the information I have gathered regarding
      MT MLI and ML I have concluded there are other
      places I would rather put my pesos than in an
      investment???? that apparently is run by a senile board of
      directors and the headless horseman from sleepy
      hollow.
      Feb.99 is a long way off in my opinion and even then
      there is no positive outlook for REITs with the current
      state of the interest rate decline. Your mention of the
      tip of the iceberg is very true in regard to what may
      happen to this and other abstract investments that are
      backed only by funny money. I have been fortunate enough
      to have survived several recessions and a major
      depression and the overwhelming evidence that we are at the
      end of a bull market is that there is simply no other
      place to put your money than under the mattress. The
      banks pay next to nothing for deposit money and the
      market is over inflated with nothing left to go to the
      little guy. Markets go up when interest rates go down,
      markets go down when interest rates go up and as long as
      people are searching for greater returns this will go on
      forever.
      The only thing that could propel this tired market
      any higher would be a whole new breed of investors
      that are willing only to trade with sophisticated
      computerized trading programs derivitaves and high margin
      balances.
      This has happened many times in history and it will
      happen many more times, ever since man could count on
      his fingers and toes, till the abacus and now with
      computers and super computers.
      The problem with all of
      this is that it is dull and monotonous.
      So... In my
      absence please try to keep the board cheerful and happy.
      Limit the technical crap as it is readily available
      anywhere. And above all, never print on a message board or
      in Email anything that you would not print on a post
      card. There simply is no security on the net.
      .

    • Don't ask will the dividend be cut...ask when and
      by how much the dividend will be cut.

      Asset
      sales = lower FFO = lower dividends

      MT will be
      an entirely different company in six months. It
      might be three or more separate companies.

    • The loss will be charged against FFO. You may not
      see a dividend.
      Assuming the story which came from
      an undisclosed source has any validity. Personally I
      would not bank on any rumors that you read on a message
      board. They provide recreation between chores for most.
      Remember too this is only a bonehead idiot responding.

      • 1 Reply to frichard97
      • Well, Frichard is wrong. FFO excludes one-time
        gains and losses.

        The race track and the land
        were marked to market for about $100-$150 million at
        the time of the purchase of SAR. Some of the $383
        million purchase price was also assigned to other assets
        that SAR held (e.g., fashion mall), but about $195
        million of the purhcase consideration was put on MT's
        books as goodwill.

        The accounting basis of the
        racetrack is in the $100-$150 million range. The tax basis
        might be different, but let's assume it's not. So MT
        might not take a loss on the sale.

        The question
        is, Does MT write off the goodwill associated with
        the purchase of SAR. It probably will, considering
        the paired share structure is being dismantled and
        the racetrack might be sold.

        This should
        create a large accounting and tax loss, and any
        dividends received will likely be treated as a return of
        capital since the dividends will exceed MT's net
        income.

        This begs the other question: how low does the
        dividend get cut? Anyone who believes that the current
        dividend will remain intact is nuts. Remember, the company
        is selling assets, and FFO will decline as a result!