Replies to post #827825 on Fannie Mae-No Politics (FNMA)

[DaJester]

I'm not even the one who cherry-picked it!

But of course you were! If only we could trust the words you type, I wouldn't have to refute you every time you reply to me.

The implied covenant is about reasonable expectations (probabilities), not mere possibilities.

You repeating it multiple times does not make it true. The implied covenant of good faith and fair dealing means both parties must act in good faith, beyond what is expressly written in the contract. One party may not intentionally thwart the other party from reaping their side of the contract. This is distinctly different from "reasonable expectations" or "possibilities". A simple Google search states:

A breach of the implied covenant of good faith and fair dealing occurs when one party's actions undermine the other party's ability to receive the benefits of a contract, even if those actions aren't explicitly prohibited by the contract's terms.

It has absolutely nothing to do with what's POSSIBLE for the other party to do. Likewise, it has nothing to do with what's PROBABLE to happen from the investor's point of view. You are barking up the wrong tree. It means one party cannot undermine the other party. This is exactly what the NWS did, and why the Jury awarded the damages. Soon to be ancient history, so try to keep up!

If your logic were correct, Lamberth would have thrown out the implied covenant claim also because the possibility existed of the economic rights being restored later.

This doesn't make any sense at all. If you come and take a piss on the Dude's Rug, that rug may immediately decline in value. That doesn't mean the rug can't appreciate after damages have been paid.

When the LP ratchets were signed, shareholders had zero economic rights (present or in the future given the status quo, which is what informs reasonable expectations), thus they didn't do any extra harm beyond the NWS and weren't implied covenant violations.

You just need to ask yourself one question. Does the LP ratchet undermine the ability for the other party to reap the benefits of their side of the contract? Again, leaving out what's possible, probable, or what a reasonable investor may expect because that's not material to the criteria for breach of implied covenant.