RE: RE: RE: RE: RE: Dominion preferred stock GoldenGun,
I have to agree with your thoughts. It's a vexing situation the Directors have themselves in.
The Income Trust Directors have a responsibility to do what is best for the unit holders of the income trust. 100% of their responsibility is to the unit holders of the Income Trust. For them to do otherwise, they would not be working to the interests of the Income Trust.
Problem is though, this whole thing is very convoluted in that some of the directors of the Income Trust are also associated with the oporating company, so, a mixed responsibility. To further add to the confusion, I believe some of the directors are also perferred share holders further mixing things up.
The way I see it, and I'm an outsider looking in through the view of having Trust Units..... The Income Trust has lost control of the oporating companies control through the 100% ownership of the Common. The Income Trust ownes no Perferred (I believe). The Income Trust holds a note payable by the oporating company. This note is now the main control the Trust has over the oporating company. If the operating company had the ability to clear the note and accrued interest from prior years (pay off all obligations the oporating comapny has with the Income trust through debt), then the Income Trust would be forced to nagociate with the Operating company to clear the "Preferred" obligations regardless of how detramental it is to the "Common" share holders (The Income Trust holds 100% of the current common outstanding).
In perspective to Dominion, the pecking order is:
1 - Debt (highest) (Income Truat holds large note of the oporating company)
2 - Perferred (What value have these Perferred share?)
3 - Common (lowest priority) (Income Trust holds 100% of current Common)
So, before the "Common" can have a dividend paid on them, the obligations of the Debt then the Perferred have to be serviced first.
As for the Bid / Ask on the Perferred, you have to think about the holders and overall interest level on the security. What price are they "Willing" to buy more shares or sell the ones they have? A company placing a share issue onto the open market must have at least one "Market Maker" for the issue (I believe and if I've understood the rules for TSX listings). My guess would be that if you had a pile of Perferred shares and attempted to unload them, the Market Maker would allow the current "Ask" to be cleared out quick then re-offer support at a much lower value. If you demonstrated the current volume of shares somehow then the Market Maker may not offer anything untill you have "Unloaded" your shares..... cheep. So, what I'm trying to say is that while it looks like a "Market" exists for the Perferred shares, you have to wonder how well the current price range will hold up if volume started hitting the security? My guess, is if you wanted in, and started buying then no end would be in sight for the number of shares people are willing to sell to you; however, dumping shares against the market "Ask" price and volume offered might not end up being so resiliant.
I stress, I'm a simple investor holding the Income Trust units. I've no knowlege other then what is available through NR's. I've no letters behind my name or qualifications as an investment advisor or anything like that. All above is my humble opinion. Good luck with your choices.