Fannie Mae (FNMA)

[kthomp19]

The NWS as an action independent of anything is not illegal. Just like if the govt decided to confiscate all of the new B-21 stealth bombers in the interest of national security, that step could be legal. But it could also violate a contract with Northrop Grumman if it was not in good faith. Northrop could claim a contract violation even from a LEGAL action. Both can be true at the same time.

Yes, now you're getting it.

And no, I did not make a "mistake" on the bad faith language, as I explained it's just easier to type and I should have been more clear since you like to nitpick the specific language people use and miss the core point they are trying to make.

An ironic accusation in light of the below.

Also, the preciseness of legal language is exactly what is at issue here. Acting in bad faith is not the same as violating the implied covenant of good faith and fair dealing. An action being illegal is not the same as that action illegally violating that implied covenant. Nitpicking such words is the core point here, not a side issue.

Lamberth does not destroy my argument because I'm not saying the NWS is an illegal act.

Once again, you have forgotten where this conversation started. It began with Section 6.12 of the SPSPAs, part of which read:

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

1) You said So you bolded the part that says it's NOT ILLEGAL for the Treasury to write down or otherwise obliterate the SPS LP?
2) I said Only under certain circumstances that have never occurred.
3) You even put the word illegal in bold no less than three different times in this response.
4) I said "The verdict did NOT say that anything at all was illegal or unenforceable."
5) You responded with This is simply not true."

The jury did not find any of the things in Section 6.12 to be illegal or unenforceable, which is what prompted my statement in #4. If you took that to mean that I said that the jury did not find the implied covenant to have been breached then you are just taking words out of context and guilty of exactly the same accusation you leveled at me above.

I'm saying FHFA cannot implement it into any agreements because it violates shareholder rights.

You will have to be far more specific as to what "it" means. Do you mean the entire NWS agreement or every single part of it?

That doesn't mean the FHFA can continue to use that language in the contracts moving forward.

What language? The definition of dividend rate? The Capital Reserve Amount? Something else? Again, specificity is very important here.

I'm pretty sure you're talking about the LP ratchet in the letter agreements. But that ratchet (LP increases $1 for every $1 of net worth FnF retain) wasn't in the 2012 NWS, which once again means the jury's verdict has nothing whatsoever to do with the 2019 and 2021 letter agreements.