the BOD could not have agreed with MUTUAL consent, there was consent but not MUTUAL, the facts surrounding conservatorship don’t show any reason why FnF should voluntary give up the company, so it was forced (and claimed by Fairholme), Sweeney is looking at the initial consent to the reasons of why FnF should have agreed to let the FHFA enter, this is the early beginning of the procedure, all split second later issues as remedy, only can be ruled on after the initial MUTUAL consent is proven or coercion was used, otherwise Sweeney will set precedents to duress/coercion problems, and that is why she specifically asks the government:
THE COURT: Oh, am I mistaken that members of 22 the board were not told that you either agree to the 23 conservatorship or you’ll be fired? Am I mistaken? 24 MR. LAUFGRABEN: I would have to go back and 25 look at what the complaints allege, but what’s important THE COURT: Mr. Dintzer, you know, I understand………….. 22 It seems from the beginning when you have FHFA 23 coming -- and Treasury coming to the board of directors 24 of the enterprises and saying you either agree to the 25 conservatorship or you’re out, it seems as though there 1 as a death grip placed on the enterprises by Treasury and 2 FHFA
THE COURT: And again -- and the other point, 7 I’m very concerned that Treasury approaches the board of 8 directors of the enterprises and says, you either agree 9 to the conservatorship or you’re out. That’s -- that 10 sounds like undue influence, if not a death grip. THE COURT: And I’m really not so much 1 concerned -- I’m really not concerned about what’s going 2 on today, I’m just saying at that time. At the critical 3 time period, you have directors of the enterprises or the 4 board of directors of the enterprises being told you 5 either play ball with Treasury or you’re out.
THE COURT: And that is a Hobson’s choice. I 8 can’t speak for those directors, but one could imagine 9 that they -- they cared about the institution that they 10 served and they would rather stay on board to see that 11 they could help direct it and protect it from these 12 outsiders that were going to come in, even though those 13 outsiders are Treasury and FHFA, and they’re concerned 14 that their organization is going to be raided. And 15 that’s -- financially. And it seems to me that that’s 16 what happened.
THE COURT: It’s as though it was somebody -- 3 they were used as like a piggy bank that they could -- or 4 it was this funding stream. And I’m a taxpayer so, I 5 mean, it’s great that the Government can generate tax 6 revenues, that’s fine. But it should be fair and 7 equitable if taxes are --
There is no misinterpretation of what she is saying, and basically she stretched out the government overstepped their authority, and the contract is installed with coercion and there was no MUTUAL consent, then the implied-in-fact contract is voidable and can be voided by FnF, but since FHFA installed a new BOD that only listens to their new matra “for profit of taxpayers” the new board members have no duty of candor toward the shareholders and only listen to FHFA, but the FHFA cannot change a “for profit company” to a “for taxpayer company”, nobody authorized that, their statue does not allow that.
COUNT XI Breach of Implied-in-Fact Contract Between the United States and the Companies (Derivative Claim on Behalf of Fannie Mae by Plaintiff Barrett)
COUNT XII Breach of Implied-in-Fact Contract Between the United States and the Companies (Derivative Claim on Behalf of Freddie Mac by Plaintiff Barrett)
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