Impac Mortgage Holdings Inc (IMPM)

[Joe Stocks]

Dave Sims, Perhaps you ave an answer for this. I just posted this comment to Darren's SA article.


Hi Darren, I have been following and commenting on these preferred shares from the beginning on various message boards. I have always been a proponent of the B series (IMPHP) shares having more value over the c series (IMPHO) I held shares of IMPHP up to maybe a year or two ago as this case seemed to never be coming to and end. After TIMMS received the memorandum opinion and order in January 2013 I thought it would not be much longer to get a decision on remaining counts. After another couple of year I gave up. See https://www.courts.state.md.us/sites/default/files/import/businesstech/pdfs/mdbt1-13.pdf
I am currently interested in revisiting. I have a couple comments.

1. In the above referenced link from the court they refer to the class action as "In this purported class action suit". The word purported bothers me. IMH uses the same language in their most recent 10K. 'purported' means; appear or claim to be or do something, especially falsely. Do you know if this lawsuit actually received class action status, or does it only benefit the named plaintiffs? I have not been able to find an answer. My understanding is that you can put class action in your lawsuit as much as you want, but the court must rule that it is a class action suit.

2. I think you are wrong about TIMMs settling for shares. I understand he is over 80. IMO, his settlement now is for his heirs. If he gets a cash judgement and settlement of rights there is really no reason for him to settle for less. His judgement becomes a lien on assets. He could garnish IMH's checking accounts. I could be wrong but I think a judgement has priority over unsecured debts. But, if he does settle for debt I think it will be for a premium of shares, not a discount. Banking on the appreciation of shares after the overhang is removed is not to TIMM's benefit when he has options that put IMH over a barrel.

I think a judgement could be very detrimental to IMH common. I think IMPHO shareholders gave up many of their rights and have no more value than common holders. I see no incentive for IMH to convert IMPHO to common. IMPHP is the only potentially profitable trade here. But if this lawsuit is not a classaction status the IMPHP shares are worth no more than IMPHO except for the named plaintiffs.

Can you confirm this is a classaction lawsuit and all holders of IMPHP shares are a party to it?

This is what IMH last 10k said "We are subject to a purported class action lawsuit relating to the tender of our preferred stock that is seeking cumulative dividends, unpaid dividends, certain restrictions on our actions, including the ability to pay
common stock dividends and the election of two directors by the preferred holders."
That one word, 'purported', has kept me from backing up the truck on this one. My how I would love to know if it is or isn't.