Fannie Mae-No Politics (FNMA)

[big-yank]

The Perry Appeal if it rests on breach of contract claims is DOA. Judge Lamberth stated his ruling indisputably. The "breach" argument rests on alleged dividend entitlements implicit in the preferred shares at the time they were issued by the GSEs.

No such shares were sold under government conservatorship. Neither FHFA or Treasury created any impression that dividends were an entitlement. So no breach occurred. Seems simple, to me.But Lamberth carries the "no breach" argument to an even higher level.

http://gselinks.com/Court_Filings/Perry/13-cv-01025-0051.pdf

Please see page 39. Judge Lamberth established with clarity that Treasury had the right to approve or disapprove dividend payments and, thus, was lawfully empowered to not pay whatever it determined was inappropriate. So there simply is no contract that assures dividend payments to shareholders. But Lamberth doesn't just stop there, with the following statement which is also from page 39:

"Without a contractual right to dividends, the plaintiffs cannot state a claim for breach of contract specifically based on their alleged dividend entitlements."

I see no reasonable way this conclusion can be reversed. That is why I have stated that the takings claim may have some limited traction in the Perry Appeal, the the rest of it is little more than legal sophistry that sounds impressive but means very, very little in a court of law.

The Delaware case is the shareholders last gasp, plus the possible and late-to-the-party auditor claims that strike me as positioning for fraud claims in a liquidation scenario that ordinarily would leave stockholders on the outside of the in-the-$$$ money "window of doom"... peering in it at the fortunate few with secured debt and/or liquidation preference. Fraud claims could elevate shareholders ranking in a liquidation hierarchy to an in-the-money position. Won't likely be much, but it would be more than ZERO.

All JMHO.