Replies to post #585478 on Fannie Mae-No Politics (FNMA)

[obiterdictum]

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

Regarding the December 6, 2019 Opinion and Order in the Fairholme 13-465C case before Chief Judge Sweeney in the US Court of Federal Claims, the above quote represents an unfounded and indefensible legal supposition concerning the Plaintiffs direct and derivative breach of implied-in-fact contract claims.

1. All direct claims were dismissed. Counts I, IV, VII and X.

2. All derivative claims of a breach of implied-in-fact contract were not dismissed and await future adjudication. These are Counts II, III V, VI, VIII, IX, XI, XII.

Since the remaining claims to be adjudicated are derivative only, there are no longer any legal claims made for Plaintiff shareholders as direct or third-party beneficiaries in this case. The status and role of the Board of Directors are not relevant. It is the opinion of Judge Sweeney that the FHFA/Board of Directors do not represent the shareholders' interests.

As plaintiffs are not parties to the alleged implied contracts between the FHFA and the Enterprises, the relevant issue is whether plaintiffs are third-party beneficiaries of those agreements. They are not. First, it is of no import that the Enterprises, as plaintiffs argue, purportedly agreed to the conservatorships because that would serve the interests of shareholders. Indeed, “every action of a corporation is supposed to benefit its shareholders,” but the “law has not viewed this general benefit as making every shareholder a third-party beneficiary.” Suess v. United States, 33 Fed. Cl. 89, 94 (1995). Second, plaintiffs’ allegations reflect that they only benefit from the alleged implied contracts by virtue of their shareholder status. The relevant promises concerned how the FHFA-C would operate the Enterprises; the crux of the purported agreements was the FHFA-C promising to operate the Enterprises as a fiduciary to preserve their assets and return them to sound condition. Because the promises in the alleged implied contracts were directed at the Enterprises, plaintiffs cannot be third-party beneficiaries of the alleged contract. See FDIC, 342 F.3d at 1320. Third, plaintiffs have not demonstrated that the FHFA intended that plaintiffs benefit independently of their status as shareholders even if they did so benefit. Plaintiffs rely on the FHFA’s statements that private stock would remain outstanding and shareholders would continue to hold an economic interests in their stock. Those factual statements, however, do not reflect that the FHFA intended to confer any specific benefit on plaintiffs independent of their role as shareholders. Because plaintiffs have not alleged facts reflecting that the FHFA intended to confer a personal benefit on them, they are not third-party beneficiaries. See Glass, 258 F.3d at 1353-54. In sum, the court lacks jurisdiction to entertain plaintiffs’ direct implied-contract claim because plaintiffs are neither parties to a contact with the government nor third-party beneficiaries of any such agreement. Therefore, the court dismisses count X. pp. 34-35 - https://www.courtlistener.com/recap/gov.uscourts.uscfc.28224/gov.uscourts.uscfc.28224.449.0.pdf

The Fairholme Plaintiffs and those related cases have made no claim for and do not seek in the US Court of Federal Claims an unwinding of the conservatorships.

The US Court of Federal Claims for purposes of the Tucker Act does not have jurisdiction to enact such a ruling.

Shareholders' direct claims and interests have been dismissed.

In Sweeney's Court, it is now about the Plaintiffs, on behalf of the GSEs, preparing for a bench trial vs the Defendants. The goal is to prove (or not) on the merits that there was a taking, illegal exaction, breach of fiduciary duty and breach of implied-in-fact contract in order for the GSEs (not shareholders) to receive, if successful, just compensation and/or damages.