From the Moelis Blueprint...
"Stakeholder Benefits
Our Blueprint provides a pragmatic and workable solution, so that all of the parties involved in litigation relating to the Net Worth Sweep will find it beneficial to agree to the terms of the proposed transactions – as would be the case in a normal restructuring process. The Blueprint emphasizes respect for the existing capital structure and restores normal corporate governance in the context of highly regulated public mortgage guarantors. We envision existing shareholders to provide a substantial contribution to assist the Enterprises in meeting their capital requirements. This contribution can take the form of a conversion of (i) existing junior preferred stock into common equity, (ii) investment in a private placement “priming” equity raise, and/or (iii) participation in the initial public primary equity issuance through a rights offering or a committed backstop facility. The goal would be to ensure a successful capital build by respecting the capital structure and providing a Blueprint that benefits all stakeholders.ix"
ix. Retirement of the Senior Preferred Stock (treating all amounts paid in excess of the initial 10% cash dividend rate as repayment of principal) should also have the benefit of allowing for a full and final settlement of shareholder litigation. While Moelis does not represent litigants, the interests of our clients are aligned with those of the litigants, taxpayers, and all other Fannie Mae and Freddie Mac shareholders. Furthermore, the practical ability to raise private capital and to monetize Treasury’s warrants is contingent on elimination of this senior preferred share overhang and a level playing field.
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