Impac Mortgage Holdings Inc (IMPM)

[Joe Stocks]

IMPHP- FYI, 10-K filed (extracts):
http://ir.impaccompanies.com/phoenix.zhtml?c=119470&p=irol-sec

"On December 29, 2017, the court denied the Company’s motion for summary judgment, granted the Plaintiffs motion for summary judgment, and stated it would schedule further proceedings to determine the appropriate relief which may include reinstating the Series B Preferred Stock holders rights and voiding the 2009 amendment, resulting in (among other possible ramifications), the reinstatement of dividend rights which have not been declared or paid since the 2009 amendment, the suspension of common dividends and the right to elect two members to the Board of Directors. The Company intends to appeal the decision.”
We are subject to a purported class action lawsuit relating to our Series B Preferred Stock in which holders are 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. In December 2017, we received an unfavorable court ruling that the rights, preferences and terms of the Series B Preferred Stock prior to the 2009 closing of the tender offer and consent solicitation remain in effect, that the 2009 amendments were ineffective, and the 2004 rights remain in effect. We intend to appeal the decision. If not reversed, the decision affects the rights of the Series B holders to receive, when and as authorized by the Board of Directors, cumulative preferential cash dividends at a rate of 9.375% of the $25.00 liquidation preference per annum (equivalent to a fixed annual amount of $2.34375 per shares) payable on a quarterly basis. Further, plaintiffs have presented post-decision arguments that Impac is required to pay three quarters of dividends to Series B stockholders and to accrue all unpaid dividends. In addition, under the Series B Preferred Stock terms prior to the 2009 amendments, whenever dividends are in arrears for six or more quarters, whether or not consecutive, the Series B Preferred Stock will be entitled to call a special meeting for the election of two additional directors. The 2004 rights also provide for certain other voting rights prior to amendment of any provisions of our charter so as to materially and adversely affect the Series B Preferred Stock, or approve a merger or similar transaction unless the Series B Preferred Stock remain outstanding and materially unchanged. We would also be prohibited from paying any dividend on our common stock until dividends on the Series B Preferred Stock are paid in full. Appeal of the court ruling will continue the cost and expense related to defending this lawsuit and diversion of our management’s efforts and attention from ordinary business operations in order to address the claims. This court ruling and the possible judgment may have a material adverse effect on our financial condition or results of operations.