UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 19, 2011
EOS Preferred Corporation
(Exact Name of Registrant as Specified in Charter)
Massachusetts (State or Other Jurisdiction of Incorporation) |
000-25193 (Commission File Number) |
04-3439366 (I.R.S. Employer Identification No.) |
1271 Avenue of the Americas 46th Floor New York, New York (Address of Principal Executive Offices) |
10020 (Zip Code) |
(212) 377-1503
(Registrants telephone number, including area code)
(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:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12(b))
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 7.01. Regulation FD Disclosure.
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
).
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 payment of dividends to its preferred and common shareholders.
Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, the OTS was abolished on
July 21, 2011 (Transfer Date), and the duties and powers of the OTS were transferred to the
Office of the Comptroller of the Currency (OCC). Consequently, effective on the Transfer Date,
the primary regulator of the Corporations parent, the Bank, became the OCC. As part of the
transition of primary regulators, the OCC, as successor to the OTS, is charged with undertaking a
review of various matters impacting the Bank and the Corporation which includes the payment of
dividends to the Corporations preferred and common shareholders.. The OCCs review is ongoing and
the Bank and the Corporation continue to work closely with the OCC during the transition period. To
date, the approval of the OCC, as successor to the OTS, required by the Amended Order for the
payment of dividends to the Corporations preferred and common shareholders has not been received.
Accordingly, the Board of Directors of the Corporation (Board of Directors) did not declare or
pay a dividend on the Corporations 8.50% Non-Cumulative Exchangeable Preferred Stock, Series D
(Series D preferred stock), that would have been payable on October 17, 2011. There can be no
assurance that approval or non-objection for the payment of future dividends will be received from
the OCC or when or if such OCC 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 OCC 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, including, without limitation, any estimates. 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 effect of the sale or dissolution of the Bank pursuant to
the Settlement Agreement entered into in connection with the bankruptcy of the Banks indirect
parent, Lehman Brothers Holdings Inc., on the business, financial condition and results of
operations of the Corporation; 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.
EOS Preferred Corporation (Registrant) |
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Date: October 19, 2011 | By: | /s/ Brian Kuelbs | ||
Brian Kuelbs | ||||
President | ||||