Many troubled banks are pleading with investors to sell trust-preferred securities back to them at a discount, warning they may fail otherwise. But a small group of investors are calling the banks' requests a bluff.

In recent months, several struggling banking companies have sought to retire their trust-preferreds for less than face value, frequently as part of a plan to raise fresh equity. But for those that issued the securities into pooled collateralized debt obligations, getting the approval to buy them back has been all but insurmountable: At least 10 institutions have failed to gain approval for discounted collateral repurchases since late last year, according to Fitch Ratings, and several of those have since failed.

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