Whitehall is not concerned at deferring long term capital gains taxes and more interested in maximizing the IRR and getting paid which they only do when a transaction is realized. Clipping an 8% coupon on a going forward basis will certainly lower the +100% IRR PFD Holdings has realized.
It's simple math that there is not enough cash left over to pay all the accrued interest let alone the par value. I urge anyone to demonstrate otherwise.
But you bring up an interesting thought and an assumption that I made was that the ARC preferreds would be a listed security. It may not be which means that Grace may hold onto the security, payout the dividend as a dividend on the Grace preferreds. However the payments won't cover the preferred divs.