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Former Capital Crossing skips July 15 dividend on 8.5% preferred stock
By Caroline Salls
Pittsburgh, July 19 - EOS Preferred Corp. cannot pay the dividend on its series D 8.5% non-cumulative exchangeable preferred stock without the approval of The Office of Thrift Supervision as a result of a cease-and-desist order entered against Aurora Bank and related prompt corrective order directive, according to an 8-K filed with the Securities and Exchange Commission.
As a result, EOS said its board of directors has decided not to declare or pay the preferred stock dividend due July 15.
The cease-and desist order was entered on Jan. 26 and the prompt corrective action directive on Jan. 26, 2009, and the prompt corrective action directive on Feb. 4.
According to the 8-K, Aurora Bank has made a formal request to the OTS to approve the payment of future dividends on the series D preferred stock and responded to various communications from the OTS for additional information on the payment of these dividends.
However, the company said the OTS has not yet ruled on this request.
Under the terms of the series D preferred stock, dividends are not cumulative, and if no dividend is declared for a quarterly dividend period, the stock holders will have no right to receive a dividend for that period.
In order to continue to qualify as a real estate investment trust, the company said it is required each year to distribute 90% of its net taxable income to its stockholders, excluding net capital gains.
If the OTS does not grant approval to pay dividends in an amount necessary to retain EOS' REIT qualification, the company said it will fail to qualify as a REIT and will be subject to federal income tax.
In addition, EOS said the change of its corporate title from Capital Crossing Preferred Corp. took effect on the Nasdaq Stock Market on July 13.
The ticker symbol for the series D preferred stock has been changed to EOSPN from CCPCN.
EOS Preferred is a Boston-based real estate acquisition and holding company.
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