Yes think the Securities Act of 1933 will apply here, as it will be more or less the same as the duty of condor from the BOD, then while Fannie and Freddie volunteered or were forced by coercion, the BOD could never have imagined it would bowl down to a voluntary give away the companies, the financial situation at time of the takeover is very important as that is the situation that allowed FHFA consent/coercion, as we all know Fannie and Freddie were not in need of funds and were not having trouble before the takeover,(provision for credit losses $27.9B and deferred Tax assets provision of $30.8 Billion that in Q2 2013 were returned and confiscated by FHFA)
Indeed it would be weird if common shareholders would not have any say in this, and a paid advisor would be an option, but the common shares are also currently represented by plaintiffs, depending on the outcome of the court a committee can always be formed as standing only start when we have a final ruling
The shareholder vote will be difficult, currently the FHFA represents the BOD of Fannie and Freddie and while the FHFA is facing serious trouble defending the shareholders rights (consent) they breached, it is not yet concluded by court they did the opposite thing as a “normal” conservator should have been doing, so for now I don’t think we can vote on anything, and must wait for final resolution by court
Think it is too early for the appraisal rights, courts yet have to decide FHFA legitimately entered into this saga, if appraisal rights are already awarded and the FHFA has done illegal things, the relief on appraisal rights would need to be overwritten and other relief need to be given instead
The Recapitalization is a problem Fannie and Freddie face and not FHFA, that is at least what the FHFA said, now in order to get new investors in line the conservatorship needs to end and the companies need to be in sound and solvent condition as that is expected after the 12 years of conservatorship, then after the final ruling the funds are returned and extra relief is given to Fannie and Freddie and shareholders for the misconduct, and the companies are recapitalized, the “old” shareholders will vote for a complete new BOD, and an investigation starts as to where it all did go wrong any new investor will only enter ones this investigation by the BOD is final, no SPO no conversion no nothing will happen, or of course the court will determine all of the misconduct that happened, but I think it will be 50/50, the problems will be ruled on by the court and the details will need to be investigated by the new BOD
The problem FHFA faces as world class regulator is loss of face, so far they have not done what is expected, nor does the FHFA publicly state they made a mistake, the continuous fighting and lieing of FHFA makes them vulnerable in the future and no new investor is willing to gamble away their money with such an unpredictable instable stubborn mentality as the FHFA currently shows, even after a ruling they have to come clean and declare what they have done is unprecedented and illegal, so the problem they face is huge and that includes the federal and state securities laws
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