I’ve had some dialogue with a Corus Investor who has been kind enough to keep me updated with what Corus is up to regarding Laketown Wharf. Below is the most recent update:
1) They suspended payment of interest on $404m of debentures (type of bond). This is the only debt that Corus (holding company) has, other than deposits. The rules of the debenture allow this for up to 20 quarters. The holders of the debentures cannot be too happy. This was done to preserve cash for operations. No big deal unless you need the interest and own the debentures.
2) They disclosed that they formally applied to TARP funds from the Treasury. If granted, they will issue preferred stock to US Treasury at 5% for 5 years. I DO NOT think they would have applied if there was any chance of rejection. This may also force a merger of Corus with another bank, but I put that at less than 5% odds because the Glickman family owns half the bank and they are not going to be too happy taking orders from anyone.
One of the Glickman wives sold about 20% of her shares. No big deal. the proceeds were enough to buy her a $30k car. She’d probably going to use the proceeds for a divorce! Her spouse owns about 6 million shares.