Paydown (payoff, really) of liquidation preference is only one possible remedy. One that isn't actually permitted by the terms of the original SPSPAs, actually.
The other remedy involves Treasury sending FnF $131B in cash and keeping the seniors intact. We don't know yet how Judge Atlas will rule, or even if she ever will.
And of course the fact that the SPSPA was not necessary to begin with, & is it illegal for the government to engage into a contract which is supposed to help the companies, but is actually a burden because it was enacting stuff congress should have done, but did not as it was too expensive to compensate shareholders? now to continue with the SPSP contract after all money is returned is asking for trouble, the main point of the contract is fulfilled
But it's possible that we are already at, or even above, the final share price! There is no guarantee whatsoever that the commons have to go up from here. If there truly were zero risk of ending up below $4, the shares would be trading well above $4.
Considering the amount of money they make, and the total numbers of shares, the possible ending of conservatorship, and MC confirming the commons would trade again as early as Q4 2020, and the maximum allowed numbers of share under the agreement is 4.6B(79.9%) would make the total 5.8B and a value of between $30 and $40, in a bad scenario, so chances we received the end price already, are not seen in the numbers they currently produce
Okay. The problem is that, as above, you ignore the possibility of Treasury keeping the seniors and sending out a ton of cash. I don't see it as likely, but it is actually the only remedy that is consistent with the terms of the original SPSPAs.
As you can see below the problem is, the government did not include a section what would happen if the government would act outside its statue, and the penalties, so I do not understand what you mean with “the possibility of Treasury keeping the seniors and sending out a ton of cash”
6.7. Effect of Order; Injunction; Decree. If any order, injunction or decree is issued by any court of competent jurisdiction that vacates, modifies, amends, conditions, enjoins, stays or otherwise affects the appointment of Conservator as conservator of Seller or otherwise curtails Conservator’s powers as such conservator, Purchaser may by written notice to Conservator and Seller declare this Agreement null and void, whereupon all transfers hereunder (including the issuance of the Senior Preferred Stock and the Warrant and any funding of the Commitment) shall be rescinded and unwound and all obligations of the parties shall immediately and automatically terminate.
6.12. Non-Severability. Each of the provisions of this Agreement is integrated with and integral to the whole and shall not be severable from the remainder of the Agreement. In the event that any provision of this Agreement, the Senior Preferred Stock or the Warrant is determined to be illegal or unenforceable, then Purchaser may, in its sole discretion, by written notice to Conservator and Seller, declare this Agreement null and void, whereupon all transfers hereunder (including the issuance of the Senior Preferred Stock and the Warrant and any funding of the Commitment) shall be rescinded and unwound and all obligations of the parties (other than to effectuate such rescission and unwind) shall immediately and automatically terminate.
2.5. Termination of Purchaser’s Obligations. Subject to earlier termination pursuant to Section 6.7, all of Purchaser’s obligations under and in respect of the Commitment shall terminate upon the earliest of: (a) if the Liquidation End Date shall have occurred, (i) the payment in full of Purchaser’s obligations with respect to any valid request for funds pursuant to Section 2.4 or (ii) if there is no Deficiency Amount on the Liquidation End Date or if no such request pursuant to Section 2.4 has been made, the close of business on the 15th Business Day following the determination of the Deficiency Amount, if any, as of the Liquidation End Date; (b) the payment in full of, defeasance of or other reasonable provision for all liabilities of Seller, whether or not contingent, including payment of any amounts that may become payable on, or expiry of or other provision for, all Mortgage Guarantee Obligations and provision for unmatured debts; and (c) the funding by Purchaser under the Commitment of an aggregate of $100,000,000,000 (one hundred billion dollars). For the avoidance of doubt, the Commitment shall not be terminable by Purchaser solely by reason of (i) the conservatorship, receivership or other insolvency proceeding of Seller or (ii) the Seller’s financial condition or any adverse change in Seller’s financial condition.
I do expect all the court cases to be settled, meaning that Judge Atlas won't end up prescribing either of the remedies. We don't know yet what form it will take, but supposedly David Thompson (plaintiffs' lawyer in the Collins case) really wants the seniors extinguished. He might not get everything he wants, though.
Agree lawsuits get settled but, David will receive more then he asked for because the other cases demand more, he less, so the middle is more then he expects
The lawsuits are going to disappear even without the 11,000 documents being released, if we can believe what Calabria has said. I would think that keeping those documents from ever seeing the light of day is one big reason for the government to come to the negotiating table. I'm not going to hold my breath on those documents ever being released.
Agree, but that will come for a price, and we indeed will let it rest and move on
"Challenging" it on a message board doesn't count at all. If anyone is going to claim that any government behavior from 2008 is illegal, they need to challenge it in court where it counts. Complaining on a message board is worse than useless.
Good one, for the same reason you are here? why are you here ?
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