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Due bills: why the record date stops deciding who is paid

Albert Gasull, editor · 11 October 2026

When a US-listed company pays out more than a quarter of its share price in one distribution, the exchange moves the ex-date to the first business day after the payment date, and in between the shares trade with a due bill. The record date then decides only whom the company pays first. The money ends up with whoever holds the shares at the close on the payment date, so a holder on the register who sells in that window hands the payment to the buyer. A record date in a tender works the other way: there it binds.

How the mechanism works

  1. Every cash distribution has three dates: the record date, when the company reads its register; the payment date, when the money goes out; and the ex-date, the first day the shares trade without the payment attached. Only the ex-date matters to someone buying or selling.
  2. US shares settle one business day after the trade, so for an ordinary dividend the ex-date is the record date itself: a purchase the day before reaches the register in time, and a purchase on the day does not.
  3. When the payment is most of the price, that rule would leave the shares trading for days at a fraction of their old value with the cash not yet paid. So the exchange moves the ex-date to the first business day after the payment date.
  4. For the days in between, every share trades with an IOU attached, a claim on the payment that travels from seller to buyer. That IOU is the due bill. The company still pays the name on its register, because the register is read once; the seller’s broker then passes the payment on to the buyer. The company “has no obligation for either the amount of the due bill or the processing of the due bill.”

The sentence to look for

In the release that declares the distribution:

“The NYSE has advised the Company that, because the payment of the Initial Liquidating Distribution represents more than 25% of the price of the Company’s shares of common stock, its shares of common stock will trade with ‘due bills’ representing an assignment of the right to receive the Initial Liquidating Distribution from the record date of October 20, 2026, through the closing of trading on NYSE on October 29, 2026, which is the Payment Date and the last day of trading before the Ex-Dividend Date (this period representing the ‘Dividend Right Period’).”

Worked example: Apollo Commercial Real Estate Finance

The company is liquidating, and its release of 9 October 2026 declared a first payment of $4.10 a share. Friday 9 October close: $6.24. On 300 shares:

  1. Distribution ÷ price: $4.10 ÷ $6.24 = 65.7%, against the “more than 25%” in the exchange’s advice.
  2. Record date Tue 20 Oct; payment date, and last day the shares trade with the payment, Thu 29 Oct; ex-date Fri 30 Oct. An ordinary dividend would have gone ex on Tue 20 Oct.
  3. Price on 30 October if nothing else moves: $6.24 − $4.10 = $2.14.
  4. The payment on 300 shares: $1,230.00.
  5. The author’s cost, 300 shares at $6.915, is $2,074.50; less the payment, $844.50 is still in the position afterwards, or $2.815 a share.

Three holders, three outcomes. One who bought by Monday 19 October and holds at the close on 29 October is on the register and is paid by the company directly. One who is on the register on 20 October and sells on any day from 20 to 29 October is still the name the company pays, and the due bill passes the $4.10 on to the buyer. A buyer in that window who holds through the close on the 29th was never on the register and receives the $4.10 anyway, having paid a price that still included it. What is left after the payment is an estimate: the proxy’s range of $7.75–8.50 for all distributions, less the $4.10 now declared, is $3.65–4.40 a share, arithmetic on the proxy and not a company figure.

Where it goes wrong

  • Reading the record date as a deadline to buy. A record date counts settled shares, and here it still does not decide who ends up with the cash. A buyer on Wednesday 28 October, eight days after the record date, receives the $4.10 by holding through the next day’s close.
  • Reading the record date as a finish line. A holder who sees their name on the register on the 20th and sells on the 21st has sold the $4.10 with the shares. The release says such holders “will be selling their right to the Initial Liquidating Distribution”.
  • Reading the ex-date drop as a loss. The screen on Friday 30 October will show the shares down by about two thirds overnight. That is the payment leaving the price.
  • Assuming the release covers the broker. The proxy warns that holders outside the United States “may be subject to U.S. withholding taxes with respect to liquidating distributions”; what a broker shows, and when, is not in the release.

How to check it

  • The release names three dates. An ex-date after the payment date is the mark of a due bill.
  • The release gives the exchange’s reason, here “more than 25%” of the share price, and the words “due bills”.
  • The release states the window, and that an investor who wants the payment “will need to hold its shares of common stock through and including the Payment Date.”
  • The distribution divided by the last close gives the size of the drop the screen shows on the ex-date.
  • The broker’s account statement shows the day the payment posts and whether anything is held back from it.

Sources

Author holds: Apollo Commercial, yes, 300 shares (11 October 2026). 99 Shares is information, not advice, and nothing here is a recommendation to buy, sell or tender any security. Terms of use.