GOVERNMENT: Reverse Wrecking

The SEC last week served notice that it wants the utility holding company skyscrapers torn down—by the freak method of ripping out the basement first. It bluntly told sprawling Engineers Public Service Co. it could not use excess cash to retire its own top-story preferred stock, must pay off underlying subsidiary bonds & stock instead. SEC's reason: this would "strengthen the financial integrity" of the subsidiaries. Retorted Engineers: yes, but it would also slash their excess-profits tax base, thus boost taxes and hamstring earnings.

All this puts Engineers back 15 months to the day it first filed application to repurchase...

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