Fannie Mae-No Politics (FNMA)

[navycmdr]

Federal Circuit Tosses Most GSE Shareholder Cases

Wed Feb 23, 2021 - [e-mail]



The Court of Appeals for the Federal Circuit on Tuesday
gutted GSE shareholder hopes of ever recouping monies
taken by Treasury in the net worth "sweep" of the two
mortgage giants, dismissing all plaintiffs’ claims in
Fairholme Funds & 7 seven other prominent
shareholder lawsuits.

The ruling was a complete loss for the plaintiffs. The
Federal Circuit didn’t simply affirm the Claims Court’s
decision to dismiss their direct claims, it also sided
with the government in its cross-appeal, reversing the
Claims Court’s decision not to dismiss the shareholders’
derivative claims.

That leaves no obvious legal option for shareholders.

The Federal Circuit judges’ opinion relies largely on
the Supreme Court’s reasoning in Collins v. Yellen.

Although that case was remanded, in part, to the Fifth
Circuit Court of Appeals, the SCOTUS opinion was firm
in asserting that agreeing to the net worth sweep was
within the power of the Federal Housing Finance Agency
at the time.