Fannie Mae-No Politics (FNMA)

[kthomp19]

Both the Washington Federal and Mike Kelley cases challenge the Conservatorship itself.

Only to get money damages. Read the Prayer for Relief starting on page 40 of the complaint from October 1.

To summarize, if the Kelly plaintiffs win:
1) the conservatorships will not be overturned
2) the original SPSPAs will continue to stand
3) even the NWS will continue to stand
4) the warrants will still be held and be exerciseable by Treasury
5) the senior preferred shares will continue to exist (though the liquidation preference might change)
6) the liquidation preference ratchet in the letter agreements will stand

The big difference between Kelly and Washington Federal is that Kelly is derivative, meaning Treasury would have to pay money to the companies rather than the plaintiffs. That would benefit current shareholders.

Of course, I think the chances of Treasury ever having to make this payout are just north of zero. This lawsuit is a good way to get a settlement in all the lawsuits, at least if it can survive a dismissal over the six-year statute of limitations in the USCFC.

Doesn't Bryndon Fisher also challenge the Conservatorship.

No, he can't because he bought his shares after the conservatorships started.