Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 2541888 times)

rros

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10390 on: August 17, 2018, 12:52:19 PM »
http://www.glenbradford.com/wp-content/uploads/2018/08/18-01226-0001.pdf

So Perry Capital now seeks compensation and brings up the nationalization issue. On behalf of the funds he represents. Depending on what/how Saxton's court rules this may move forward? And if so, what happens to us that are not represented by Perry as investment manager? What recourse do we have? File a lawsuit?

Quote
PRAYER FOR RELIEF WHEREFORE,

Plaintiff seeks a judgment as follows:

A. Awarding Plaintiff just compensation under the Fifth Amendment for the government’s taking of its property;
B. Awarding Fannie and Freddie just compensation under the Fifth Amendment for the government’s taking of their property;
C. Awarding Plaintiff damages for the government’s illegal exaction of its stock;
D. Awarding Fannie and Freddie damages for the government’s illegal exaction of their net worth;
E. Awarding Plaintiff damages for the government’s breach of fiduciary duty;
F. Awarding Fannie and Freddie damages for the government’s breach of fiduciary duty;
G. Awarding Plaintiff damages for the government’s breach of implied-in-fact contract;
H. Awarding Fannie and Freddie damages for the government’s breach of implied in-fact contract;
I. Awarding Plaintiff pre-judgment and post-judgment interest;
J. Awarding Plaintiff the costs and disbursements of this action, including reasonable attorneys’ and experts’ fees, costs and expenses; and
K. Granting such other and further relief as the Court deems just and proper.

Interesting everybody is turning towards the nationalization theme.

P.S. I have the stock certificates from 2010 for all my preferred shares. Is there such a thing as calling counsel and asking to join?
« Last Edit: August 18, 2018, 08:11:34 AM by rros »


cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10391 on: August 19, 2018, 08:45:42 AM »
this is total speculation, and I don't even know what the upshot of it might be, but notice that we have two young-ish former state Supreme Court judges, willett and stas, each of whom have been recently appointed to federal circuits and been prominently mentioned as future scotus nominees.

willett has come out in collins with a tour de force dissent on the APA claim (NWS outside conservator's authority).  next up is stas in saxton.

now, understanding that from a "realist" point of view, judges are indeed concerned with their future prospects and renown, one wonders whether stas will follow willett's path and write a strident opinion or just go along with his panel's trend.

will willett's dissent encourage stas to "hold serve" and if so what would be the result?

believe me, judges are aware of their press clippings and willett and stas clearly form a cohort of two. if and how that affects stas with respect to his consideration of the APA claim is something unknowable, but I don't doubt that stas has considered it when he reads willett's dissent.

allnatural

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10392 on: August 19, 2018, 03:50:59 PM »
Although i'm holding out hope, I'm not sure Judge Stras is our man in Saxton. He was the one who thought NWS was a nationalization and that plaintiffs best argument was that FHFA was at the will of the Treasury. He didn't appear to bite on APA violation as he seemed to conclude that a conservator under HERA is a different beast than common law conservatorship, and was the one who pointed out that shall was used in other parts of HERA, so why not here. Unless Willet's dissent is enough to persuade him, his mind might already be made up on APA.

I thought Judge Benton was better for us as he highlighted multiple times that the Cedarminn case was plaintiffs best argument and the defendants really had no response to him. Judge Kelly is the wild card I believe. She kept probing at what the outer-limits of the FHFA's powers was, and is there no situation where courts may question the business judgment of the FHFA? But she was appointed by Obama in 2013 and we know how politically driven our justice system is.
« Last Edit: August 19, 2018, 03:56:59 PM by allnatural »

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10393 on: August 20, 2018, 07:34:51 AM »
Although i'm holding out hope, I'm not sure Judge Stras is our man in Saxton. He was the one who thought NWS was a nationalization and that plaintiffs best argument was that FHFA was at the will of the Treasury. He didn't appear to bite on APA violation as he seemed to conclude that a conservator under HERA is a different beast than common law conservatorship, and was the one who pointed out that shall was used in other parts of HERA, so why not here. Unless Willet's dissent is enough to persuade him, his mind might already be made up on APA.

I thought Judge Benton was better for us as he highlighted multiple times that the Cedarminn case was plaintiffs best argument and the defendants really had no response to him. Judge Kelly is the wild card I believe. She kept probing at what the outer-limits of the FHFA's powers was, and is there no situation where courts may question the business judgment of the FHFA? But she was appointed by Obama in 2013 and we know how politically driven our justice system is.

the other thing I noticed about the collins/saxton willett/stas pas de deux is the effect of the nationalization theme raised prominently in the saxton oral argument.  there is a whole different argument that, apart from considerations of "may" authority re conserve/preserve, congress couldn't have authorized fhfa to nationalize FnF unless it did so explicitly.  this is a nuanced argument that goes beyond the standard conserve/preserve argument.

and collins counsel (same as saxton) picked up on this "nationalization" nuance in their notice of appeal for rehearing en banc in 5th circuit.
« Last Edit: August 20, 2018, 09:54:35 AM by cherzeca »

blackcoffee

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10394 on: August 20, 2018, 02:00:29 PM »
Do you know what remedy the All American case is seeking exactly? Is it similar to undoing a previous action while under a unconstitutional regime like the plaintiffs want with the NWS? If so that is indeed positive, assuming the 5th circuit takes up the issue.

Good point. If I understand (relevant part of) the SCOTUS Lucia case correctly, plaintiffs have the right to expect some sort of remedy on top of the courts just fixing the agency's structure to make it consitutional. If All American's desires are taken into account, hopefully Collins's wish for the NWS to be unwound is as well.

https://howardonmortgagefinance.com/2018/07/10/some-pre-comment-comments/#comment-7492

why do we care about the gov't getting paid back on a deal that they negotiated between itself and itself based on lies to everyone?

I have a hard time caring.

Midas79

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10395 on: August 20, 2018, 02:11:14 PM »
Do you know what remedy the All American case is seeking exactly? Is it similar to undoing a previous action while under a unconstitutional regime like the plaintiffs want with the NWS? If so that is indeed positive, assuming the 5th circuit takes up the issue.

Good point. If I understand (relevant part of) the SCOTUS Lucia case correctly, plaintiffs have the right to expect some sort of remedy on top of the courts just fixing the agency's structure to make it consitutional. If All American's desires are taken into account, hopefully Collins's wish for the NWS to be unwound is as well.

https://howardonmortgagefinance.com/2018/07/10/some-pre-comment-comments/#comment-7492

why do we care about the gov't getting paid back on a deal that they negotiated between itself and itself based on lies to everyone?

I have a hard time caring.

Because Treasury basically holds all the cards here. They have to approve a release from conservatorship and would be the ones that would be giving up the senior liquidation preference and NWS dividends in any administrative reform scenario. Treasury being able to claim victory per the original bailout terms (10%) could be an important point from a political optics perspective.

It seems grossly unfair that Treasury has collected over $280B in dividends (almost $100B more than they advanced to FnF), has $193B in liquidation preference, and the right to buy 79.9% of common shares for a pittance. But that's where we stand. Treasury is negotiating from a position of extreme strength, so making it seem like they're winning is the only way to get them to the table. That or a court victory that has so far eluded us.