- Current report filing (8-K)
January 05 2011 - 5:20PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): November 30, 2010
EOS Preferred Corporation
(Exact Name of Registrant as Specified in Charter)
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Massachusetts
(State or Other Jurisdiction
of Incorporation)
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000-25193
(Commission File Number)
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04-3439366
(IRS Employer
Identification No.)
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1271 Avenue of the Americas
46
th
Floor
New York, New York 10020
(Address of Principal Executive Offices)
(212) 377-1503
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act.
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act.
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Pre-commencement communications pursuant to Rule 14d-2b under the Exchange Act.
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.
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Item 7.01.
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Regulation FD Disclosure.
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On November 30, 2010, Aurora Bank FSB (the Bank), the parent of EOS Preferred Corporation (the
Corporation), entered into a Stipulation and Consent to Issuance of Amended Order to Cease and
Desist with the Office of Thrift Supervision (the OTS) whereby the Bank consented to the issuance
of an Amended Order to Cease and Desist (the Amended Order) issued by the OTS, which amended the
original Cease and Desist Order issued by the OTS on January 26, 2009 (the Original Order). In
addition, on November 30, 2010, the OTS terminated the Prompt Corrective Action Directive,
originally issued to the Bank on February 4, 2009.
More detailed information can be found in the Amended Order itself, a copy of which is available on
the OTS website (
www.ots.treas.gov
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The Amended Order did not amend provisions in the Original Order that require the Bank to ensure
that each of its subsidiaries, including the Corporation, complies with the Original Order as
amended. These operating restrictions, among other things, restrict transactions with affiliates,
capital distributions, contracts outside the ordinary course of business and changes in senior
executive officers, board members or their employment arrangements without prior written notice to
the OTS.
Under the Amended Order, the Corporation must continue to seek and receive approval from the OTS
for the declaration, payment and distribution of dividends to its preferred and common
shareholders. There is no assurance that the OTS will approve any request for the declaration,
payment or distribution of dividends. As an operating subsidiary of the Bank, the Corporation
remains subject to all of the terms and conditions of the Amended Order which would apply to such
operating subsidiaries.
On December 17, 2010, the Bank, on behalf of the Corporation submitted an Application for Capital
Distribution to the OTS requesting permission to pay the fourth quarter 2010 dividends to the
Corporations preferred and common shareholders. On December 30, 2010, the OTS provided a
non-objection to the Bank permitting its operating subsidiary, the Corporation, to declare and pay
the fourth quarter 2010 dividends to its shareholders.
Accordingly, the Board of Directors of the Corporation (the Board of Directors) declared on
December 31, 2010, a dividend payable on January 14, 2011, for the quarter ended December 31, 2010,
to holders of record on December 31, 2010 of each of: (1) the Corporations 8.50% Non-Cumulative
Exchangeable Preferred Stock, Series D (the Series D preferred stock), in the amount of $0.53125
per share; (2) the Corporations Preferred Stock, Series B, par value $0.01 per share, in the
amount of $20 per share; and (3) the Corporations common stock in the amount of $884,385.
The OTS has not approved or provided a non-objection to any further dividend distributions. There
can be no assurance that approval or non-objection for the payment of future dividends will be
received from the OTS or when or if such OTS approval requirement will be removed. Furthermore, any
future dividends on the Series D
preferred stock will be payable only when, as and if declared by the Board of Directors. The terms
of the Series D preferred stock provide that dividends on the Series D preferred stock are not
cumulative and if no dividend is declared for a quarterly dividend period, the holders of the
Series D preferred stock will have no right to receive a dividend for that period, and the
Corporation will have no obligation to pay a dividend for that period, whether or not dividends are
declared and paid for any future period.
In order to continue to qualify as a real estate investment trust (REIT), under the Internal
Revenue Code of 1986, as amended, the Corporation generally is required each year to distribute to
its stockholders at least 90% of its net taxable income, excluding net capital gains. As a REIT,
the Corporation generally is not required to pay federal income tax if it continues to meet this
and a number of other requirements. If the OTS fails to remove the requirement for approval and
does not grant further approval or non-objection to the Corporation to pay dividends to its
stockholders in an amount necessary to maintain the Corporations REIT qualification prospectively,
the Corporation will fail to qualify as a REIT and, as a result, will be subject to federal income
tax.
Forward-Looking Statements
This Current Report on Form 8-K contains certain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended.
Those forward-looking statements include all statements other than those made solely with respect
to historical fact. Numerous risks, uncertainties and other factors may cause actual results to
differ materially from those expressed in any forward-looking statements. Forward-looking
statements should not be unduly relied upon because they involve known and unknown risks,
uncertainties and other factors, some of which are beyond the control of the Corporation.
Such risks, uncertainties and other factors include, but are not limited to: limitations by
regulatory authorities on the Corporations ability to implement its business plan and restrictions
on its ability to pay dividends; the risk that the failure of the Corporation to maintain its
status as a REIT would result in the Corporation being subject to federal income tax, including any
applicable alternative minimum tax and excise tax; the risk that the Corporation could be
disqualified from treatment as a REIT for the four taxable years following the year during which
qualification was lost; further regulatory limitations on the business of the Bank that are
applicable to the Corporation; the risk that a decline, or a perceived decline, in the Banks
capital situation may result in the Series D preferred stock being subject to an automatic exchange
into preferred shares of the Bank; the risk that the Banks capital ratios may fall below certain
specified levels and that the Bank may be forced to merge with or be acquired by another entity or
begin voluntary dissolution; the risk that the Series D preferred stock will in the future be
delisted from The NASDAQ Stock Market or will otherwise cease to trade on The NASDAQ Stock Market;
the risk that the Series D preferred stock may not otherwise retain value and/or
liquidity; the risk that the Corporation may not have adequate cash available, including as a
result of the Corporation being subject to federal income tax, to pay dividends with respect to the
Series D preferred stock; negative economic conditions that adversely affect the general economy,
housing prices, the job market, consumer confidence and spending habits which may affect, among
other things, the credit quality of the Corporations loan portfolios (the degree of the impact of
which is dependent upon the duration and severity of these conditions); the level and volatility of
interest rates; changes in consumer, investor and counterparty confidence in, and the related
impact on, financial markets and institutions; legislative and regulatory actions which may
adversely affect the Corporations business and economic conditions as a whole; the impact of
litigation and regulatory investigations; various monetary and fiscal policies and regulations;
changes in accounting standards, rules and interpretations and the impact on the Corporations
financial statements; changes in the nature and quality of the types of loans held by the
Corporation; and risks relating to the Corporations business discussed in its filings with the
Securities and Exchange Commission.
These risks, uncertainties and other factors may cause the actual results, performance or
achievements of the Corporation to be materially different from the anticipated future results,
performance or achievements that are expressed or implied by the forward-looking statements.
Forward-looking statements speak only as of the date they are made, and the Corporation undertakes
no obligation to update any forward-looking statement to reflect the impact of circumstances or
events that arise after the date the forward-looking statement was made.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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EOS Preferred Corporation
(Registrant)
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Date: January 5, 2011
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By:
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/s/ Thomas OSullivan
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Thomas OSullivan
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President
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Eos Preferred Corp. - Series D Non-Cumulative Exchangeable Preferred Stock (MM) (NASDAQ:EOSPN)
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