Greenlight Capital titled its preferred stock proposal iPrefs, however, the hedge fund withdrew a shareholder lawsuit surrounding the payout earlier in 2013.

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The Collins amendment will make banks replace a commonly accepted form of hybrid capital called trust preferred securities with common stock or other securities.

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Sure Warren Buffett seems to keep making money but he has enough capital and clout to negotiate preferred stock deals to rescue distressed companies in exchange for no-lose deals that give him a 6% guaranteed return with the chance for upside in the stock, as he did with Bank of America (BAC) in August.

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If a government recapitalisation does prove necessary, the treasury is likely to take one of two routes: a preferred-stock investment that allows the agencies to raise more capital of their own, or nationalisation through a common-equity injection that leaves current owners with nothing, and thus offers the taxpayer a better deal.

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The Treasury bought preferred stock in over 700 banks to give them an additional capital cushion, while mortgage backed securities and mark to market accounting were wiping bank capital out.

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Greenlight Capital's Einhorn urged Apple shareholders to reject a bid to eliminate preferred stock from the company charter.

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In the typical capital structure of a venture-backed company, the investors have bought preferred stock, which entitles them to get their money back before proceeds are shared with the management team and other holders of common shares and options.

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