Greenlight Company Presentation
What Happens If They Don't Pay the Dividend?
o No default and no bankruptcy
o Distributions to the common stock would be halted
o Dividends accumulate and must be restored before common stock dividends
restart
o After multiple dividend misses, preferred shareholders can demand
board representation
Greenlight Capital, Inc.
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iPrefs are equity, not debt. There is no such thing as a default. The company has the option to cut
the dividend, just like it can cut a common dividend, which of course would send a negative message
to the market. But aside from that, cutting the dividend just means that there can't be additional
payments or distributions to the common stock until Apple catches up on dividends to the iPrefs.
While this scenario is unlikely, it is important to understand that there are no circumstances where
issuing iPrefs puts the company at risk of failure.
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