Fannie Mae-No Politics (FNMA)

[kthomp19]

If one party takes action that prevents the other party from realizing the fruits of their side of the contract, then there is a breach of (implied) contract. This isn't about a person's expectations, it's about contractual obligations.

It is ONLY about shareholder expectations. When Lamberth allowed the implied covenant to go to trial and said this on page 16:

But if the contract is silent on the issue, the Court must consider whether implied contractual terms
fill the gap. MHS Capital LLC v. Goggin, C.A. No. 2017-0449-SG, 2018 WL 2149718, at *12
(Del. Ch. May 10, 2018). To do this, the implied covenant asks "what the parties would have
agreed to themselves had they considered the issue in their original bargaining positions at the time
of contracting." Gerber v. Enters. Prods. Holdings, LLC, 67 A.3d 400, 418-19 (Del. 2013),
overruled on other grounds by Winshall v. Viacom Int 'l, Inc., 76 A.3d 808 (Del. 2013). As noted
by the D.C. Circuit, Perry II, 864 F.3d at 631, this analysis hinges on the parties' "reasonable
expectations at the time of contracting." Nemec, 991 A.2d at 1126; see also SunTrust Mortg. Inc.
v. Morts. Unlimited, Inc., No. 3:11CV861-HEH, 2012 WL 1942056, at *3 (E.D. Va. May 29,
2012)

Reasonable expectations are what define the implied covenant.

The stock contracts between shareholders and FnF are not updated to reflect that as of xxx date, they can no longer be expected to receive a share of profits.

Wrong again. From Lamberth's opinion linked to above, this time on page 19:

For an investor contract, the time of contracting for the purposes of the implied covenant
inquiry must be the time of the most recent change in contract—whether by amendment or change
in law.

Shareholders' expectations with respect to the September 2019 and January 2021 letter agreements by definition included the status quo at the time, which was the full cash NWS signed in August 2012 being in force (though modified in 2017 to allow FnF to keep $3B of net worth each, in return for increasing the LP by $3B per company). Those expectations did not include the jury's verdict because that verdict didn't happen until 2023.