Fannie Mae-No Politics (FNMA)

[kthomp19]

I'm splitting my response to the injunction stuff into a separate post.

If Litigants go to court asking for an injunction against the US's Dilution solution, wouldn't that slow down the planned 2nd steal of shareholders wealth?

What would be the impact on prospective investors who are shelling out Billions of dollars in fresh capital of the uncertainty of pending litigation?

I hope your response again isn't, "Hell if I know".

Certainly not. I know exactly what would happen here.

On p. 23 of the Supreme Court's Collins opinion they said:

Instead, we conclude only that under the terms of the Recovery Act, the FHFA did not exceed its authority as a conservator, and therefore the anti-injunction clause bars the shareholders’ statutory claim.

That was after saying that the anti-injunction clause (aka 4617(f)) would not apply if FHFA exceeded its statutory powers as conservator (last full paragraph on p. 12).

Let's compare and contrast the NWS with a senior-to-common conversion:

1) The NWS unquestionably hurt the companies and hurt their regulatory capital levels. A senior-to-common conversion helps both (+$193B to core/Tier 1/CET1 capital at zero cost in an instant).
2) The NWS prevented FnF from ever raising capital because nobody would ever buy shares while the seniors - with their enormous liquidation preference and rights to all of FnF's income - were in place. A senior-to-common conversion paves the way for FnF to raise capital because that liquidation and dividend preference would be out of the way.
3) The NWS was a flagrant violation of FHFA's (supposed) mandate to conserve and preserve assets. A senior-to-common conversion doesn't affect assets, but again makes raising capital possible.

The Supreme Court said that the NWS was a valid act of a conservator. Given that baseline, there is no universe in which FHFA offering Treasury a senior-to-common conversion is not also a valid act of a conservator.

Therefore the anti-injunction clause of HERA, 4617(f), will prevent any plaintiff from seeking injunctive relief over a senior-to-common conversion.