With all the recent acrimony over "realism", I thought I would review my own perspective one more time:
- With very few exceptions, it seems that anyone who knows anything about FnF (i.e., the Administration, Congress, Wall Street, MSM, etc.) continues to repeat/promote the belief that FnF NEEDED a massive bailout AND that they even CAUSED the 2008 collapse in the first place because of their FAILED business model. Overall, either folks don’t know about us or they are against us for various reasons.
- So far, every court decision has been a victory for the D’s except the remand to Lamberth which, if I understand correctly, offers nothing for common, and Sweeney’s discovery, which hasn’t gotten very far and has yet to produce to evidence strong enough to defeat the anti-injunction clause.
- The government effectively has unlimited money, resources and time. P’s are paying out of pocket and are getting older and poorer every day. These dynamics do not favor the P’s.
- If the NWS is not defeated, even in a RRR, shareholders face the possibility of the warrants being exercised, FnF having to repay the PSPA obligation (which would be the ultimate theft but all monies paid to Tsy so far have been dividends, NOT reductions of principal) and the dilution that will be needed to recap the companies – at levels that might be unnecessarily high.
- The company’s capital is being intentionally run down to zero. That may or may not force a resolution, but one thing is for sure – having zero capital will make it easier to make FnF look weak and in need of a replacement, not harder.
All the above points are based on facts and/or outcomes that are supported by existing documents that, again, so far have not been successfully challenged in court. The reality is that we are in a very deep hole and the market – which is watching this like a hawk to make a windfall – is saying the outcome is highly uncertain. I personally believe the function of FnF will continue, but the current shareholders may not, as frequently happens in Chapter 11 reorganizations and asset sales under Chapter 7 liquidations.
As far as I can tell, every counter argument to the above is based on hope – which also happens to be my own investment thesis as a legacy “hostage” investor who bought just before the cship. Cheers
