investorG

a question for the lawyers, please: ignoring the 31 day delay on the legal fees issue, how is it possible for the plaintiffs to not have received the 50 documents several weeks after the ruling? How hard is it to send them over? I think this is where most of the average person message board frustration comes in, for everyone who lives in the real world of deadlines and action, how / why is the legal system so different? thanks

understood now -- it's not as easy as a fix under HERA. thank you. if HERA is unfixable, what happens as it relates the forward looking capital stucture? no senior preferred, no 80pct warrants?

ok. i guess they could simply provide the same remedy as the PHH case, have the president be able to fire watt (or go to a multi commissioner independent structure) but lets assume you're right --- could the perry appeals court invalidate hera or rather would a fresh lawsuit need to be started? the latter?

would they make a $100bn+ decision to overturn the NWS on a reporting and chain of command technicality that was easily fixed in the PHH case? the FHFA was 'barely' mentioned in a 100 page document, it's not like this was a central part of the opinion.

with only 5 cases left, any strong opinions on the securities prices post-announcement under the 3 core scenarios? I'll go with 80 cents, $3.25, and $7 for affirm / remand / reverse, respectively, for the common and double each price for the 25-par preferred.

Do you believe the government, in 20trn of debt, will throw away warrant values of $150bn+ for these plans...?

what should we be looking for if/when the order from honorable sweeney is made public?

by using the word 'remaining' in the letter, it appears Perry has been selling shares lately, obviously contributing to the decline in recent months. in a march 2014 bloomberg article, his estimated stake was $500mm. Prices are 60-70pct lower now, which suggests around $175mm, prior to any recent sales. there are 33bn of face value jr preferred, if the combined amount is trading around 15 cents on the dollar, that's 5bn of market value. so Perry likely owns around 3pct of the preferred shares. Most importantly, I am grateful for his efforts on behalf of all GSE public shareholders --- thank you to you and your team.

yes, it is speculation. in that regard it's important how damaging any released documents are and if they come out before the election. if any released documents are mild and come out in december, a settlement is less likely and vice versa. i understand many want the truth, warrants canceled, and everything freed, etc, but ultimately I believe the plaintiffs would be satisfied at this point with a solid financial victory that enables all stakeholders to benefit from the companies' profits.

regarding a potential settlement, the plaintiffs would likely only drop their cases for upfront certainty / payments. otherwise they will likely plow on in the courts, and accept the risks (0 value) and time (years) that entails. a 4th amendment could be later overturned by the next president or congress.

a 'settlement' could possibly be easier accomplished in the form of a tender offer for jr preferreds at a discount to par but still well above current levels. since they are carried at par on the balance sheet, this transaction would increase overall equity and -- in theory -- create extra $ for a common stock 1-time special dividend. lawsuits would likely go away. this would not admit any wrong doing, but simply allow the public shareholders to participate, along side the government, in the GSE's excellent operating performance of recent years.

I believe one could make an argument the GSE securities would be trading higher than current levels in the absence of ANY court challenges. As time goes on, animosity wears down, leaving several outcomes for a compromise solution that benefits all parties, even if it doesn't satisfy everyone's dream prices. Moreover, while still possible, it becomes harder for politicians to throw away 150-200bn of warrant value for moral hazard concerns as the US sinks further into debt, especially when simply holding more capital / loan loss reserves (built up over time) vs pre-crisis levels can reduce future taxpayer risk.

would someone please explain to the non-lawyers what happens if there is a split decision between the ACA claim and the other breach / fiduciary duty avenue? if both are losers, than that's obvious, and vice versa. but what happens if one is affirmed and the other remanded, or even reversed? thanks in advance for any thoughts.

I believe a jr preferred tender offer / buyback below par value would increase the 'net worth' of the company, which would then be 'available to sweep' to the government (or in this case diverted for a 1-time common shareholder special dividend). anyway, just an idea...

thanks, cherzeca, for your response. one more question: is this win-win-win scenario possible (outside of the courts) ----- FNMA tenders for the junior preferred at a healthy discount to par (but still multiples of current levels), the company books a large gain because the jr preferreds are carried on the balance sheet at par, and then rather than sending those earnings to Treasury, this one time they use the $ for a special dividend for common shareholders (the public 20pct portion)? At this point I'd think many of the lawsuits would be dropped. Thanks in advance for any comments.

Question, if the Perry appeals court remands, it goes back to lamberth (or someone else), and they rule for the gov't, and then it gets appealed again, will it go back to the same 3 judges (m,g,b) in the dc court of appeals, or a new roster is picked? In other words, will G in particular want to make his mark on this case by either affirming or reversing rather than vacate/remand and leaving it up to others? Thanks in advance for any replies