Fannie Mae-No Politics (FNMA)

[DaJester]

The implied covenant is entirely based on reasonable shareholder expectations. Lamberth titled section iii on page 20 "Plaintiffs Plead Sufficient Facts to Support a Finding that their Reasonable Expectations were Violated by the Third Amendment"

Entirely? Gotta love your extreme language, especially when it's extremely incorrect. You can just do a simple Google AI search. The reasonable shareholder expectation part relates to determining if a party acted in bad faith, or to help determine what contractual benefits the party would have reasonably expected. It is not by any means the sole criteria for determining if there is or is not a breach.

Here's an excerpt from an American Bar Association website:

The covenant requires a contract counterparty to refrain from arbitrary or unreasonable conduct that has the effect of preventing the other party to the contract from receiving the fruits of the bargain. 4 What is arbitrary or unreasonable is not, however, judged at the time of the alleged wrongful act. Rather, the court will look to the parties’ intent at the time they entered into the contract to determine the parties’ reasonable expectations.

Emphasis added. You realize - you are merely pointing out that Lamberth did his job when referencing p19 - considering the time of the contracting? Gee, thanks Sherlock. You've cracked the case wide open!

Note that a breach is based on the effect of making the other party's side of the contract moot. Then, the arbitrary or unreasonable criteria comes into play. The NWS was not a "normal" business operation decision. It is something that unreasonably thwarts the other party. In the Lamberth case, based on the understanding the Plaintiffs aka "reasonable" Shareholders had at the time the parties entered the agreement (including the amendments), it was determined that giving away the profits via the NWS was a violation of the Implied Covenant. Barring appeal, the breach is a done deal, the jury has spoken - get over it!

Your argument would subject FnF to double jeopardy: you would have them pay a second time for somehow removing economic rights that the NWS already took away.

Umm, no. A new breach of the implied covenant would be a new breach. Suppose FHFA wanted to reinstate the NWS again in June 2025. All of those retained earnings GONE in an instant say all the way back to $3B. You think they can do that and win any/all litigation because it would be double jeopardy? Hahahaahhaa!! You think the economic rights are already gone, so they can literally do whatever they want?? Hahahahaa!! That's so stupid it's laughable. If the NWS was a breach of the implied covenant the first time (AND IT IS), it would 100% be a breach doing it again. So would any other action that meets the criteria of "preventing the other party to the contract from receiving the fruits of the bargain." Losing a jury decision and paying damages is not a get out jail free card for future violations to the agreement...🙄