The dismissal was not unexpected given Pagliara's complex approach to HERA, Virginia corporate law and the FHFA conservatorship as a means to the end of inspecting the books and records of Freddie Mac for the purpose of exposing alleged wrongdoing.
The judge's decision was based on (1) a broad statutory interpretation of HERA's transfer of rights and powers from stockholders, etc. to the FHFA (Section 4617(b)(2)(A) and (B)) and (2) a somewhat reactionary interpretation of Virginia Code 13-1-771(D)(2) as condemning of Pagliara's purpose for inspecting Freddie Mac's books and records.
District Court Judge James C. Cacheris states in conclusion:
In sum, the Court concludes that Pagliara does not retain the right to inspect corporate records. Even if Pagliara did possess that right, the Court will dismiss the Complaint because Pagliara does not have a proper purpose.
With a different legal presentation of the complaint and its purpose, it is conceivable that there would not have been a dismissal.
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