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-ve retained earnings indicate that the company is running into losses. Since dividends are paid from current earnings or earnings retained over a period of time it would be very unwise to drag the RE into further negative territory by paying dividends. The priority of the sponsors would be to first make RE positive and then issue dividends. On the contrary, sponspors can inject hugh amounts of capital to make the equity positive (hence cover the losses) and then issue dividends but that's just a ridicilous proposition and no one would be willing to go with it.
No Business can pay out dividends if it has negative retained earnings, Dividend is a payment made to shareholders based on its retained earnings for a given period of time. If tcompany has no retained earnings from which to draw the dividend payment, it cannot issue the payment .
no
