Fannie Mae-No Politics (FNMA)

[kthomp19]

In a civil claim pursuing such damages, harm must be demonstrably actual. Hypothetical, possible or impending harm does not count.

I would appreciate your thoughts on a theory that I have heard, and repeated, regarding hypotheticals and the warrants.

There are three scenarios in play here:

1) FnF stay in conservatorship as they are now
2) Treasury exercises the warrants and allows FnF to be released
3) Treasury cancels the warrants and allows FnF to be released

Treasury has veto power over any release from conservatorship by section 5.3 of the original SPSPAs. Therefore, if they insist that exercising the warrants is one of their conditions of granting release, scenario #3 above cannot happen.

However if scenario #2 happens, a common shareholder's claim of harm would be based on the idea that they lost money in scenario #2 as compared to scenario #3 and therefore Treasury is liable. Due to the previous paragraph, I don't think this argument would work because scenario #3 is impossible (a counterfactual). Instead it must be scenario #1 compared to scenario #3 to calculate harm, and if no loss of share value occurs then there is no harm and thus no taking.

Can plaintiffs really compare to a counterfactual (scenario #3) like this?