Vineyard National Bank Preferred (fka VNBAQ)

[samplescave]

stock2windaily, be careful with those "preferred shares"!

Looks to me like the VNBC Outstanding Shares are Very Safe.

It appears the "preferred" shares are not safe.

"...It is unlikely that preferred securities will recover their investment...."

Read this again!

"...It is unlikely that unsecured creditors of VNB, including holders of trust preferred securities, will recover their investment..."

Where did I get this? Last sentence...
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Stock Purchase Agreement

On November 12, 2008, the Company entered into a stock purchase agreement (the “Purchase Agreement”) with Vineyard Bancshares, Inc., a newly formed Minnesota corporation (the “Buyer”), pursuant to which the Company agreed to sell to the Buyer all of the outstanding shares of stock of the Company’s primary asset, the Bank. The Buyer is a newly-formed corporation organized and controlled by the Company’s chairman of the board, Douglas M. Kratz, who serves as president and chief executive officer of the Buyer.

A special committee of the Company’s Board of Directors composed of disinterested directors was formed to review strategic alternatives and for the purpose of considering and negotiating the terms of a potential transaction with the Buyer because certain directors of the Company would have a material financial interest in the transaction. The special committee reviewed and negotiated the proposed transaction with the Buyer and unanimously recommended to the Board of Directors of the Company the approval of the Purchase Agreement. The Board of Directors of the Company, excluding interested directors, approved the transaction based on the unanimous recommendation of the special committee.

Under the Purchase Agreement, the Buyer has agreed to purchase the Bank for up to $18.0 million, of which $10.0 million is payable at the closing of the transaction (the “Initial Purchase Price”). The balance of the purchase price is payable if the Bank’s loan losses for the period between October 1, 2008 and September 30, 2011 are less than $125.0 million (the “Additional Purchase Price”). Of the Initial Purchase Price, VNB’s senior lender, First Tennessee Bank National Association (the “Senior Lender”), would receive $9.0 million in full satisfaction of VNB’s $48.3 million outstanding indebtedness to the Senior Lender, and the remaining $1.0 million would be paid to the Company. The Senior Lender also has the right to receive the entire Additional Purchase Price if paid.

The transaction is structured as a sale of the Bank’s stock to the Buyer. The transaction would be effected pursuant to one of the following methods, as agreed between the Buyer and the Company: (a) a direct sale of the Bank shares to the Buyer subject to shareholders’ approval (the “Sale”), (b) foreclosure by the Senior Lender and subsequent transfer of the Bank shares to the Buyer (the “Foreclosure”), or (c) a sale of the Bank shares to the Buyer pursuant to Section 363 of the U.S. Bankruptcy Code (the “Bankruptcy”). It is unlikely that unsecured creditors of VNB, including holders of trust preferred securities, will recover their investment.
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Here's more good news for the VNBC Common Shares...

"...The initial purchase price for this purpose means the greater of $10.0 million or the actual bid accepted for the sale of the shares of the Bank..."
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This current movement of VNBC is not about the "preferred shares".

This is all about the ticker "VNBC" Outstanding Shares, Common and Float.

For the sake of keeping these two entities "VERY SEPARATE", please keep the posting of the preferred share company on your board.

Thanks~