Fannie Mae-No Politics (FNMA)

[kthomp19]

wouldn’t it stand to reason that some courts in the future may conclude that taking 80% of the companies after everything that has transpired thus far, would not be in the best interest of the companies in their quest to recapitalize, etc?

I don't see how the warrants hurt the recap process. Treasury just needs to exercise them right now and get it over with, in my opinion. I don't see a reason to wait, unless perhaps they want to do a junior-to-common conversion first (which would be difficult with the warrants outstanding). An SPO can't happen while the warrants exist either.

Or is it your opinion that because most of the current lawsuits don’t address the warrants, that the Gov will throw caution to the wind and exercise them just since nobody is challenging them, with the exception of the Washington Federal case?

Pretty much this. Even Washington Federal isn't trying to have the warrants overturned, they just want the warrants' existence factored in when Sweeney awards damages. WF also only seeks damages for pre-conservatorship shareholders, and has long been rumored to be one of the parties most willing to settle.

Since Washington Federal has already brought up the warrants in its case, I don't think any prospective plaintiffs would have to wait until the warrants are exercised to bring a lawsuit. The fact that nobody else has bothered to challenge the warrants tells me that they don't believe it is worth the trouble.

In fact, I don't see how a post-conservatorship shareholder can bring a successful lawsuit against Treasury (after the warrants are exercised) at all. What is the plaintiff going to say, "yeah we knew Treasury had the warrants when we bought our shares, but we didn't think they were going to use them!"