Community Psychiatric to Retain Organization
A proposal to convert Community Psychiatric Centers from a corporation to a limited partnership was defeated in shareholder balloting Tuesday, the Santa Ana-based company said.
The proposal, which was opposed by Community Psychiatric’s largest shareholder, New York-based J.P. Morgan & Co., would have enabled the company to do away with paying income taxes, passing the savings onto its investors.
Morgan, which holds 10% of the company, opposed the plan because it would have required some tax-exempt funds it manages to pay taxes on their income from Community Psychiatric.
Federal law exempts some funds from taxes on corporate earnings and dividends, but provides no such exemption for earnings from limited partnerships.
Also on Tuesday, Community Psychiatric’s directors voted to increase the quarterly dividend to 12 cents a share from 8 cents per share, payable to shareholders of record on March 10, 1987.
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