Fannie Mae-No Politics (FNMA)

[big-yank]

This is an all or nothing fallacy. Of course the GSE Act clearly states that you cannot imperil the enterprise by paying dividends for which funds are insufficient. But what it does NOT say is that you cannot pay some dividends to both JPD and SPD shareholders that are within the enterprise's ability to pay. And if my sense is correct that Delaware Corporate Law prohibits discrimination against one class of dividend claimants over another, part of what was paid to UST under the 10% earlier arrangement or under the sweep in Amendment 3 must be paid back and distributed to JPD stockholders. If you pay one, you must pay all in the preferred class.

This isn't really all that hard to see.

I am not confusing debt with equity, you are. You stated earlier that senior dividends had priority for payment over junior preferred dividends. I said that was untrue, except in liquidation. With debt repayment, senior and junior debt must all be paid, as due, or the enterprise goes into default. It is illegal to claim you aren't in default because you paid your preferred debt, so that is good enough. If junior preferred debt declares a payment default, the entire organization goes into receivership.

These are common issues in reorganization law and ones I am well familiar with over many, many years.

JMHO.