Replies to post #585390 on Fannie Mae-No Politics (FNMA)

[Guido2]

Wow! Wow! Wow!

You hit it out of the ball park once again. Thanks ano.

[action8101]

You are the real deal. Thanks, Ano for all your efforts. Truly appreciated!!

[Lotto65]

Thank you Ano!

[FOFreddie]

Another Gigantic Thank You Ano!

Regarding the Duty of Candor issue - how do you look at the liability will play out in a Derivative claim. Am I right to assume that the Company probably fully indemnified the Board so pursuant to the indemnification the Company is liable for the breach of the Duty? How would this work in a Derivative claim since damages will be paid to the Company?

It seems clear that the Fiduciary interest is for the benefit of Shareholders for FNMA since it is Delaware law. How about under Virgina law for FMCC?

Doesnt the breaches relating to the Board really go to the heart of the quote from Judge Sweeney about Hank Paulson and UST acting like "thugs". How can a BOD uphold its fiduciary duties when the first thing they hear is their heads hitting the ground?

[Doc.007]

Thank You !

[FOFreddie]

Another Gigantic Thank You Ano!

Regarding the Duty of Candor issue - how do you look at the liability will play out in a Derivative claim. Am I right to assume that the Company probably fully indemnified the Board so pursuant to the indemnification the Company is liable for the breach of the Duty? How would this work in a Derivative claim since damages will be paid to the Company?

It seems clear that the Fiduciary interest is for the benefit of Shareholders for FNMA since it is Delaware law. How about under Virgina law for FMCC?

Doesnt the breaches relating to the Board really go to the heart of the quote from Judge Sweeney about Hank Paulson and UST acting like "thugs". How can a BOD uphold its fiduciary duties when the first thing they hear is their heads hitting the ground?

[Embers]

Nice summary Ano!

[Release us]

Another great post. Our team of experts have voted to feature this post at the top of the page for one week. We gave you a follow also.

Kudos and keep up the good work.

[kthomp19]

So What does Fairholme want in Sweeney’s Court ? (13-465C)

now although this sounds like an easy one, as they only demand “just compensation” the difficulty starts with, what has the government done to plaintiffs, to demand “just compensation”, this can mean 2 things, either the 3th amendment prohibited rehabilitation and therefore ”just compensation” should be awarded, or the conservatorship itself was a taking as the complete rolled out action ending at the 3th amendment forbids the companies to be rehabilitated and since they had 10+years to fix the problem, they neglected a problem and therefore “just compensation” should be awarded for the conservatorship itself

Once again, you somehow post all the correct facts while coming to a completely incorrect and indefensible conclusion.

Read #84-88 in Fairholme's complaint that you linked to, which comprise the bulk of Count I. They only challenge the NWS. Sweeney can not and will not review or change any government (FHFA or Treasury) decisions from 2008 for two reasons: the plaintiffs do not ask Sweeney to do this and the plaintiffs do not have standing to do this. The idea that Sweeney can or will change any part of the original SPSPAs as a result of the Fairholme case just plain ignores the law.

this is a catch-22 as both are not legal

The idea that the conservatorships themselves are illegal is only your opinion. It is not an allegation of the plaintiffs.

1) For claim one “The just compensation” it not specified as to what action violated the 5th amendment, the conservatorship itself, or the 3th amendment in the SPSPA only, maybe this is somewhere in the redacted documents or maybe fairholme did this by intent, but sure this results in TOLLING, so future litigation can have standing because the rest of the world only received redacted documents

Absolutely false. First, it is quite clear from reading the complaint that the "just compensation" that the Fairholme plaintiffs seek only relates to the NWS and not the entire conservatorships. To reiterate, the Fairholme plaintiffs don't have standing to challenge the entire conservatorships! Sweeney cannot and will not ignore such standing issues by somehow working a change to the original SPSPAs into a ruling.

Second, future litigants do not magically gain standing due to the release of the documents, whether redacted or not. Standing is not a right and does not travel with the shares. Anyone who wants to challenge any part of the original conservatorships or original SPSPAs would have to have owned shares on the day(s) that the conservatorships started and the original SPSPAs were signed. Full stop, no exceptions.

4) The Breach of Implied-in-Fact contract is also NEW in the second amended complaint and makes the conservatorship itself impossible, while we currently do not know what the demands of the Implied-in-Fact contract are, it doesn’t matter from a legal point of view, the BOD represents the interest of shareholders and they have a “duty of candor” that does not allow a verbal Implied-in-Fact contract, this problem is something the government cannot overcome, and will eventually lead to unwinding the conservatorship itself

Once again this is completely and 100% wrong. This breach of implied-in-fact contract does not make the conservatorships impossible because the allegation only refers to the NWS.

While FnF are in conservatorship, the boards of directors only do what FHFA tells them to do, and Sweeney found that FHFA does not have a fiduciary duty to shareholders. This is why Count VII was dismissed.

What you will be forced to accept, once all of Sweeney's cases are either settled or wind their way to a conclusion via court orders and appeals, is that the Fairholme plaintiffs do not and cannot challenge events from 2008. Your insistence on the Fairholme case, or any case other than Washington Federal, somehow being about the original conservatorships and SPSPAs rather than just the NWS is pure wishful thinking.

The only outstanding case that has standing to even look at events from 2008 is Washington Federal, and they only want money damages for pre-conservatorship plaintiffs.

[Donotunderstand]

fantastic

so

in summary terms


a key powerful set of (derivative) claims "will proceed"

[955]

Obit, I would really like to hear your point of view on this. I think I'm not alone in this request. In all due respect to ano, it appears to me he makes a fine argument. Can you comment? TIA.

4) The Breach of Implied-in-Fact contract is also NEW in the second amended complaint and makes the conservatorship itself impossible, while we currently do not know what the demands of the Implied-in-Fact contract are, it doesn’t matter from a legal point of view, the BOD represents the interest of shareholders and they have a “duty of candor” that does not allow a verbal Implied-in-Fact contract, this problem is something the government cannot overcome, and will eventually lead to unwinding the conservatorship itself, and because this claim is now made in the second amended complaint in 13-465C, it is now in the public territory, that the takeover of FHFA is illegal, as the BOD cannot step into an Implied-in-Fact contract, because of their “duty of candor”
Link to implied-in-fact contract: https://www.law.cornell.edu/wex/contract_implied_in_fact
Link to BOD duty: https://www.gsb.stanford.edu/sites/gsb/files/publication-pdf/cgri-quick-guide-03-board-directors-duties-liabilities.pdf

[Ace Trader]

ANOTHER GREAT POST

Question ? If the Gov has decided that there's no way to defend there take over now the documents have being handed over gone through and the damaging evidence is there and exposed. If the Gov went along with the courts to hand back the companies to the BOD. Then 2 things will happen!

BOD will still be under the FHFA which is controlled by the Gov.

The Gov will still have control and dictate how the companies will run. eg, share structure, IPO etc. So even if the courts award it back to private hands the greedy Gov still has there fingers in the pie correct ???

[Pecker9Wood]

Who are they protecting from stockholder by hold and censoring the documents. There is a huge injustice flying out in the open in your face and shielding criminal activities and what is your recourse?
Years and years of argument, tons of cash spent, damages in loss of confidence in the judicial system and government, loss of personal property and basically loss of rights granted under the constitution and bill of rights.
Oh they may say it not so as look at the progress in court. Hell people have and may yet die before they see justice. Where is the swift justice? Not even close.

[chxal]

Ano, Your analysis and reporting are outstanding!

From what you have published, it really appears that the
Govt is in a no-win position, based on the contents of the
documents, which Sweeney is not going to allow being sealed or
redacted any more.

Thank you for your diligent work on this. I breathe a big sigh
of relief that from all appearances, we "own" them (USG) now.....

[EternalPatience]

After all this, if we are still looking at 14 to 20 per share it will be truly disappointing..

Atleat 50-60 is a reasonable expectation IMHO

[philipmax]

ano,KUDOS! GREAT DISTILLATION! IMPRESSIVE CONTRIBUTION!