As long as Professors can make buffoons of themselves for the sake of the mighty dollar. Let’s explore the details of the DIME LTW.
The first objection by Rosen’s group was that these instruments are equity securities based on the terminology at time of the distribution (and I’m extrapolating since I’m in the car writing this - hey, no one is giving me $600 per hour to pontificate) was that the bank may distribute shares in lieu of cash. I believe that this is what the defendants are pinning their hopes for summery judgment on. In 1980, Dime Bank stock was trading in the single digit numbers as low as 11/2. The reason was that it had numerous bad loans on its books as well as those on the Anchor Bank books that it acquired and it was in dire need to repair its capital ratios, or go under, as other venerable NY banks were doing. The FDIC was loath to issue its precious cash directly to the stockholders. It was thought that a better destination for the “award” (if the lawsuit prevailed) was to give the cash to the bank, and allow the bank to issue shares, thus enhancing the bank’s tier one capital at the same time. I believe that other banks in the West did just that, yet, still others chose to distribute the award in cash. So the term may, indeed means just that - the option (careful with that word) or choice. The bank at its option may issue stock instead of the cash. Our attorneys have to dig up some testimony to this in order to substantiate it in Court.
My wife is returning from her shopping so I’ll proffer my other thoughts at a later time.
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