Fannie Mae-No Politics (FNMA)

[Dollars1]

Donotunderstand, I wasn't sure if you had seen this before in regards to the two cases. This is a clip midway into an article from 2013, but interesting.

"On Wednesday, junior preferred shareholders filed a class action in the U.S. Court of Federal Claims, asserting that the August 2012 agreement between FHFA and the Treasury amounted to an illegal seizure of their property in violation of the Takings Clause of the Fifth Amendment of the U.S. Constitution. The preferred shareholders, represented by Boies, Schiller & Flexner and Kessler Topaz Meltzer & Check, point to the $66.3 billion dividend Fannie and Freddie paid to the government in the second quarter of 2013, arguing that more than $60 billion of that money was misappropriated from them.

The new shareholder class action follows an injunction suit filed Sunday in federal court in Washington by Perry Capital and its lawyers at Gibson, Dunn & Crutcher. The Perry suit, which claims that the August 2012 agreement between Treasury and FHFA “enriches the federal government through a self-dealing pact, and destroys tens of billions (of dollars) of value in the companies’ preferred stock,” seeks a declaratory judgment that the amended agreement violates the Administrative Procedures Act, as well as an injunction against implementing the new agreement. In addition, the mutual fund Fairholme Funds and several insurance companies that own Fannie Mae and Freddie Mac junior preferred shares filed a Takings Clause case on Tuesday night in the Court of Federal Claims. Cooper & Kirk, which represents the Fairholme plaintiffs, raises allegations that parallel those in the new class action but brought the case only on behalf of the named shareholders.

There’s also a month-old class action for holders of Fannie Mac and Freddie Mac common shares under way in the Court of Federal Claims. As I’ve reported, that case asserts that the government’s 2008 takeover of the mortgage lenders and the FHFA’s subsequent operation of Fannie Mae and Freddie Mac was an illegal taking under the Fifth Amendment. The new class action, which only involves preferred shareholders and focuses on the 2012 amendment rather than the 2008 takeover, does not overlap with the previously filed case.

It’s notable that the new class action was filed by Boies Schiller, which innovated the technique of suing for lost shareholder value under the Takings Clause in litigation for former AIG chief Hank Greenberg, who claims that the government’s 2008 bailout of AIG wrongfully deprived shareholders of tens of billions of dollars in equity. Though the new Fannie Mae and Freddie Mac case involves alleged government overreaching four years after the economic crisis, said Boies partner Hamish Hume, it raises similar allegations that Treasury violated the Fifth Amendment and ran roughshod over shareholders."

http://blogs.reuters.com/alison-frankel/2013/07/10/fannie-freddie-shareholders-demand-lost-dividends-from-u-s-in-new-class-action/