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Series B Redeemable Preferred Stock (Series B Redeemable Preferred Stock [Member])
12 Months Ended
Dec. 31, 2013
Series B Redeemable Preferred Stock [Member]
 
Series B Redeemable Preferred Stock

Note 10.  Series B Redeemable Preferred Stock

 

On June 3, 2008 the Company offered and sold 332,500 shares of 10.0% Series B Cumulative Preferred Stock.  The shares were sold for $25.00 per share and bear a liquidation preference of $25.00 per share.  Underwriting and other costs of the offering totaled approximately $0.6 million to the Company.  The net proceeds plus additional cash were used by the Company to pay an $8.5 million bridge loan with General Electric Capital Corporation. At December 31, 2013, 332,500 shares of 10.0% Series B preferred stock remained outstanding.

 

Dividends on the Series B preferred stock are cumulative and are payable quarterly in arrears on each  March 31, June 30, September 30 and December 31, or, if not a business day, the next succeeding business day, at the annual rate of 10.0% of the $25.00 liquidation preference per share, equivalent to a fixed annual amount of $2.50 per share.  Dividends on the Series B preferred stock accrue whether or not the Company has earnings, whether or not there are funds legally available for the payment of such dividends, whether or not such dividends are declared and whether or not such dividends are prohibited by agreement. Commencing with dividends due on December 31, 2013, the Company suspended payment of dividends on its Series B preferred stock to preserve capital and improve liquidity. Undeclared dividends on the Series B preferred stock will not bear interest. Undeclared dividends are $208, or 0.625 per share, as of December 31, 2013.

 

The Series B preferred stock will, with respect to dividend rights and rights upon the Company’s liquidation, dissolution or winding up, rank: (a) senior to the Company’s common stock, (b) senior to all classes or series of preferred stock issued by the Company and ranking junior to the Series B preferred stock with respect to dividend rights or rights upon the Company’s liquidation, dissolution or winding up, (c) on a parity with the Company’s Series A preferred stock and with all classes or series of preferred stock issued by the Company and ranking on a parity with the Series B preferred stock with respect to dividend rights or rights upon the Company’s liquidation, dissolution or winding up and  junior to all of the Company’s existing and future indebtedness.

 

The Company will not pay any distributions, or set aside any funds for the payment of distributions, on its common shares, unless it has also paid (or set aside for payment) the full cumulative distributions on the preferred shares for the current and all past dividend periods. The Series B preferred stock has no stated maturity and is not subject to any sinking fund or mandatory redemption (except as described below).

 

The Series B preferred stock is redeemable as of June 3, 2013.  The Company may redeem the Series B preferred stock, in whole or in part, at any time or from time to time on for cash at a redemption price of $25.00 per share, plus all undeclared dividends. Also, upon a change of control, each outstanding share of the Company’s Series B preferred stock will be redeemed for cash at a redemption price of $25.00 per share, plus all undeclared dividends.  At December 31, 2013, no events have occurred that would lead the Company to believe redemption of the preferred stock, due to a change of control or failure to maintain its REIT qualification, is probable.