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Author: ssalz Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35379  
Subject: Trust Preferred Securities Date: 4/26/2009 4:59 PM
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I understand how a trust preferred security works. My question is what are the negative consequences of a company delaying payment of the dividend for any period of time. The positives are saving more money for the company, What are the negatives. Are the negatives severe enough to really dissuade the company from delaying payment?

Dr. Steve
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Author: schurchill16 Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 27189 of 35379
Subject: Re: Trust Preferred Securities Date: 4/26/2009 5:15 PM
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Dr. Steve,

The trust preferreds I've bought have continued paying the dividends in this market despite the fact that the terms of the prospectus specifically give them the option to defer payment with no recourse of the holder.

One that I own stopped paying interest before I bought it, but it's in the miidst of attempting to avoid bankruptcy... SIXFP (formerly SIX-B).

I think the only negative is the perception that bankruptcy is coming, and the fact that interest would begin to accrue on the unpaid interest.

Scott

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