Replies to post #311 on EOS Preferred Corp Series D Pfd (fka EOSPN)

[Kharybdis]

You just described why it makes sense to me to take a position here. Going further, even if the Bank is sold and the Series D Prefs don't get taken out you still probably trade back near par or perhaps even above par in this rate environment, depending on the buyer, when the holdco is no longer a sub of an entity in Chapter 11 bankruptcy and divs get paid regularly without needing quarterly approval.

[Enterprising Investor]

LEHMQ Disclosure Statement for Third Amended Joint Plan does state:

LBHI agreed to take steps as necessary to maintain the Banks’ capital at certain levels and to sell Aurora Bank and to sell or wind-down Woodlands prior to March 2012. If sales cannot be completed by that date, LBHI will within such period complete the dissolution and wind-down of the Banks by purchasing their respective remaining assets.

The plan was dated 8/31/11. Shortly thereafter, issues in Europe began ramping up. It would not surprise me to see a little latitude being given to complete a sale versus the start of a liquidation of the banks.

Liquidation of Aurora Bank FSB could also entail selling the bank in pieces.

[h_man_investor]

You are correct. The mandate to sell Aurora was part of a settlement between the OTS, the bank and Lehman and it settled a lawsuit between Lehman and Aurora over tax loss carry forwards and mortgage servicing rights (amongst a few other things).

The requirement to sell wasn't necessarily mandated by the OTS but was mandated by Lehman as part of the CMA.

The mandate also states that if by Feb 28th the bank isn't likely to be sold, the bank will submit a liquidating plan.

Having said that with the way things has operated in the past, it wouldn't surprise me if the timeline is deferred- but as long as EOS pays a dividend, I don't really care!