I think that they are being conservative in their disclosure relating to the dividend. If they do not pay it, the company loses its REIT classification for 1998. It will owe a lot of tax in 1998. The company would be open to many lawsuits, as well as substantial tax, interest and penalties. I feel confident the dividend will be paid.
You did miss the reference that OAC has indeed chosen to give up its REIT status.
That was in the Yahoo news reference I cited. However, I find the link has expired. So here's a different Yahoo link.
biz.yahoo.com
Here, specifically, is the statement of the Chairman/CEO:
"William C. Erbey, Chairman and Chief Executive Officer, stated, ''On December 21, 1998, our Board of Directors approved a proposal to terminate the Company's status as a real estate investment trust (''REIT'') and to change to a taxable C-corporation. By eliminating the dividend requirement, retained earnings can be used to enhance liquidity and shareholders' equity, as well as to facilitate the transition of the Company to a growth strategy."
How does this change your evaluation of OAC as an investment, Labrador? |
