Replies to post #305484 on Fannie Mae-No Politics (FNMA)

[TII]

Dollars, thanks again for the time and money you have invested in posting these filings.

One thing is for sure, we now know Ackman still has his 10% of FnF commons, as of yesterday's filing at least. Not that I ever doubted it.

[Hvp123]

I. The Court Must Interpret HERA So As To Avoid Serious Constitutional Questions Under The Takings Clause. .................. 5
II. The Net Worth Sweeps Are Takings Without Compensation........ 9
A. Conservatorships Do Not Eliminate Shareholders’
Property Interest In Their Stock. ............................................... 9
B. The Net Worth Sweeps Constitute Takings Under Any
Mode Of Analysis. ...................................................................... 17
1. The Net Worth Sweeps Are Direct Government Appropriations Of Private Property..................................... 20
2. Even If The Net Worth Sweeps Are Assessed As
Regulatory Takings, Compensation Is Required................. 22

[Hvp123]

A conservator conserves. It cannot siphon off and expropriate, each quarter, all profits of a company it is supposed to conserve. Through the Net Worth Sweeps, FHFA acts as an anti- conservator.

[Hvp123]

The Government has a categorical duty to pay just compensation when it takes your car, just as when it takes your home.

[Hvp123]

The Net Worth Sweeps epitomize the “paradigmatic taking”: “a di- rect government appropriation ... of private property.” Lingle, 544 U.S. at 537. Each quarter, with no end in sight, the Government takes the Companies’ net worth for its own use. Under our Constitution, that is a taking.
This conclusion in no way hinges on whether the Government actual- ly takes legal title to the stock. A taking occurs if the Government takes funds “linked to a specific, identifiable property interest such as a bank

[Hvp123]

The Government cannot escape liability for a taking simply because some investors purchase shares in hope that the taking will be reversed. Lost Tree, 2015 WL 3448943, *6. Here, the Net Worth Sweep takings could end under court order or because the Government voluntarily ceases the deprivations, perhaps under a new Administration or a congressional enactment re- quiring such a termination. This obviously does not change the fact that currently, the Government is taking private property.

[Hvp123]

Under the Sweeps, the Companies’ net worth is taken every quarter. Shareholders are completely barred from receiving any money from the

Companies in the form of dividends, or from realizing the gains that would result if the Companies could reinvest their earnings, or from an- ything else that could provide economic value to shareholders. The Sweeps do nothing to decrease the Government’s liquidation prefer- ences in the Companies, which stand at $189.5 billion. Nor do they af- fect the Government’s warrants to purchase up to 79.9% of each Com- pany’s common stock. The upshot is that the Sweeps destroy the com- mon shares’ entire economic value, now and until they are stopped.
The Sweeps’ scale is vast. The Government has already stripped the Companies of hundreds of billions of dollars, which is more than the amount saved through “sequestration,” and more than the annual GDPs of 140 countries. To date, the Government’s dividends amount to over $40 billion more than the Government invested in the Companies.

[Hvp123]

Given “the magnitude of” the Sweeps’ “economic impact and the degree to which [they] interfere[] with legitimate property interests,” the Government’s asserted justifica- tions could not save its case even if credited

[Hvp123]

Through the Sweeps, the Government takes the Companies’ profits and puts them in its own coffers.

Pretty detailed arguments by Pershing. Glad to see we are represented by them in the court. It will be hard for govt to respond to this n TH amicus.