W2007 Grace Acquisition I, Inc. (fka WGCBP)

[trepanne]

EI doesn't it make sense the reason those dividends weren't included in the MOU is because that would mean that the lawyers for the Plaintiffs would have been paid a much higher fee?... had that happened it would have actually hurt the shareholders.

You aren't thinking about this from the POV of the people who actually negotiated the settlement - the attorneys and Goldman Sachs.

Goldman only cares about the total dollar amount, and that they achieve final closure. They're indifferent to paying the shareholders and having the shareholders pay the attorneys out of that, or paying the attorneys directly and reducing the amount paid to shareholders.

The attorneys strongly prefer getting paid by Goldman rather than the shareholders. For one thing, it gets them paid faster, cheaper, and with less risk. For another, it allows them not to disclose how much they got paid.

You're upset now, but you'd be just as upset if you received those accrued dividends followed by a substantial bill from the attorneys for their services. Now you'd be mad at your lawyers too instead of just being mad at Goldman Sachs, there's a chance you'd refuse to pay their bill, even if you did pay they'd have to wait, and the tax characteristics of extra cap gains plus 2% floor portfolio deductions (for the lawyers' fees) would actually be worse for you economically than receiving the lower amount in the first place.

But they fully intend to pay them down the road. This is a liquidation.

"Down the road" as in "after you have surrendered your shares in exchange for $26 and are no longer entitled to receive any further distributions".

It's a somewhat bitter pill to swallow, I know... especially for those who paid par prior to the buyout.

Getting hung out to dry in a buyout is an occupational hazard for holders of REIT preferred stock, but this is the worst example of which I'm aware. Usually the sponsors just hang onto the capital, suspend the dividends, and quit issuing financial reports. Goldman went one further and actually made a concerted attempt to steal the money here. The directors of W2007 Grace Acquisition I should be tarred, feathered, and run out of town on a rail. Instead their malfeasance will go completely unpunished.