I was reading an article about Income Investment Risks, where "reports might not be filed" was mentioned as one of the risks of investing in fixed-income securities (presumably preferred stock in this case):
REPORTS MIGHT NOT BE FILED - Some prospectuses say that the security can be liquidated if reports aren't filed. I never took that danger too seriously until some Verizon securities were liquidated for that reason. Not called at $25, liquidated for less. In the Verizon cases, securities issued just months before at $25 were liquidated for a lot less, because the market price had dropped.
- In the context of the excerpt above, what is a "report"? How does not filing this report justify liquidation below the face value?
- How does this liquidation work? Will there be some kind of announcement, followed by a cash deposit into my brokerage account? Will this cash deposit be equal to the market value of the preferred shares at the time of liquidation?
- The article mentions "some Verizon securities" that were liquidated because "reports aren't filed". Which Verizon securities? It would be helpful to know, so that I could do a case study.