Fannie Mae-No Politics (FNMA)

[The Man With No Name]

What do you think might be attempted against the juniors that would trigger a lawsuit? I am generally quite skeptical of any lawsuit threats I read about, but at least the juniors have specific contractual rights, that's the Lamberth case.

I should have been more clear. If the conservatorship is converted into a receivership, then you get a whole new round of litigation based on 12USC4617(b)(2)(K)(i):

(K)Other provisions

(i)Shareholders and creditors of failed regulated entity

Notwithstanding any other provision of law, the appointment of the Agency as receiver for a regulated entity pursuant to paragraph (2) or (4) of subsection (a) and its succession, by operation of law, to the rights, titles, powers, and privileges described in subsection (b)(2)(A) shall terminate all rights and claims that the stockholders and creditors of the regulated entity may have against the assets or charter of the regulated entity or the Agency arising as a result of their status as stockholders or creditors, except for their right to payment, resolution, or other satisfaction of their claims, as permitted under subsections (b)(9), (c), and (e).

^^^^^^^^^^^^^^^^^^^^

This is why I highly doubt the exit strategy would involve the creation of a newco via a receivership. Receivership actually means creditors and shareholders can file claims, suits, etc. When in conservatorship mode, the succession clause eliminates these rights (because in theory they aren't supposed to be robbing us blind with the NWS, etc.) SCOTUS was wrong for the very distinction I pointed out above, as you know they ruled a conservator can basically act like a receiver but not allow the rights contained in section K(i) above. Conversion to receivership would create an avalanche of claims....it's not worth the trouble to the government...and it would be perceived as a failure of whatever administration is currently in charge since receiverships are thought of as bankruptcies.