Thank you for your kind comments. I am glad to be able to provide some useful information.
You have somewhat anticipated my weekend plans. I intend to dig into the other bailout cases of the era and how they have since been resolved. I want to better understand how they might be used as precedent applied to the FnF situation. (Not necessarily in the legal sense of the word, but perhaps "moral precedent," to coin a phrase.)
Regarding your use of the word "usurious" to describe the terms of the original SPSPA, that does have a strong legal meaning. So I will take you as meaning "despicably onerous," and agree that resolution of the FnF debacle ought to have some sort of parity with the other bailouts. In particular, the undoing of the third amendment on which we have focused in this discussion, in my mind, is simply the most obvious first point of attack. It seems so very clearly to be illegal, as opposed to simply immoral, as "despicably onerous" might imply.
Truly, (IMO) the only arguments that FHFA/Treasury have to support their defense of the third amendment are the technicalities of jurisdiction and standing of the plaintiffs to make claims against them. I see these as the crucial elements of the suits, and it is not a trivial possibility that these could go against the plaintiffs. Even if what FHFA and Treasury did is clearly illegal, the plaintiffs may not have the legal right to argue that aspect. And I expect these will also be likely points of appeal if things do go against the defendants in court and they wish to appeal.
But putting aside those technicalities and assuming the cases are heard, the law seems damning to the defendants. Even if FHFA did have an administrative record of the decisions leading to the amendment, facts show that any claims that it was of benefit to the companies (so-called relief of the horrible burden of the dividends threatening to death spiral them into insolvency) are ludicrous. The amendment literally serves to deplete completely (bar the reserve cushion) the net worth of the companies. That is ridiculously, absurdly, beyond any adverb or adjective in human understanding, the diametric opposite of the conservator's DUTY to preserve and conserve the assets of the companies. It is SURREAL to me still, that anyone should have to point that out! And yet I do! (Sorry to YELL, but how can I not? IT IS SSSUUURRRRRREEEEAAAALLLL!!!!!!!)
Then there is that constructive purchase argument against Treasury in Perry, Fairholme, et al. I originally had considered this a weak argument, in the sense that it is not particularly compelling; the legalities of it don't point to something horribly evil. (Even though the result was evil.) But the beauty is that the only evidence required is the third amendment itself. Everything else in the argument is citation of law, i.e., HERA and the securities laws governing what constitutes a purchase of securities. No need for messy, heel-digging discovery.
Anyway, I hope soon to gain more significant insight into the overall situation of what might be considered equitable resolution in areas other than the third amendment. I certainly like your idea of reducing the 10% per annum to a flat 10% instead, and particularly if the situation of the warrants can be at least mitigated, that is potentially huge for the common shareholder. Once I have absorbed some of the details of the other bailouts, I can take a more confident stance on these other aspects.
AI
