FNMA and FMCC preferreds. In search of the elusive 10 bagger.

[investorG]

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.

[doughishere]

**SEALED** OPINION AND ORDER granting 270 Motion to Compel. By no later than October 14, 2016, defendant shall file a memorandum with the court explaining why the court should not require defendant to pay plaintiffs' reasonable expenses incurred in making the motion, including attorney's fees. Signed by Judge Margaret M. Sweeney. (sp) (Entered: 09/20/2016)

 

Anyone confirm?

[doughishere]

Confirmed.

[SnarkyPuppy]

Attorney fees..?

[Steve_Berk]

well at least one judge isn't just going to allow the govt to steamroll her. We really needed some good news

 

**SEALED** OPINION AND ORDER granting 270 Motion to Compel. By no later than October 14, 2016, defendant shall file a memorandum with the court explaining why the court should not require defendant to pay plaintiffs' reasonable expenses incurred in making the motion, including attorney's fees. Signed by Judge Margaret M. Sweeney. (sp) (Entered: 09/20/2016)

 

Anyone confirm?

[TonyG]

Paying attorney fees.. as in government was wasting everyones time? or does that mean something else?

[merkhet]

Here's a screenshot from PACER helping to confirm. This is excellent news.

 

And to answer TonyG, yes, Sweeney is basically saying that defendants have acted inappropriately and wasted everyone's time -- and therefore should be paying plaintiffs' attorneys fees.

[Guest cherzeca]

couple things.

 

first since order is sealed it isnt clear on its face which docs it applies to.  but i have attached docket#272, which is the redacted motion for #270, which sweeney just granted.  in #272, cooper & kirk argue against ALL assertions of privilege, so i dont think it is a leap to conclude that sweeney just struck down all govt privilege claims...full monty!

 

second, yes i think an order to govt explaining why attys fees should not be paid is a shot across the govt's bow, as in dont try an interlocutory appeal of this motion.

 

which gets me to three, @steve and @merk, can govt appeal before producing docs for Ps?

 

https://www.dropbox.com/s/zwdjcliu6d7qmua/redacted%20fairholme%20motion%20to%20compel.pdf?dl=0

[merkhet]

I'd hasten to add that if it was only a partial grant on some docs and not others, I don't think that Sweeney would have added that she thinks the government's lawyers should be penalized and have to pay for plaintiffs' reasonable costs.

 

I don't think this would qualify under an interlocutory appeal (has to be dispositive to the case, etc.), but that doesn't mean they can't apply for one and try and delay some more.

[Guest cherzeca]

so reading fairholme's motion to compel, it seems that it argued that all govt assertions of privilege were improper, and it submitted some 50 documents for sweeney to inspect in camera to assess this claim.  she granted fairholmes motion. so when sweeney's motion is unsealed, i would expect that it will say that govt can't withhold any of those 50 docs based upon the asserted privileges...and i also expect it to say something about the 11,000 other docs that govt has withheld under claim of privilege.  just how far and definitive sweeney goes re those other 11,000 docs (which she didnt inspect) is unclear now, but i think i would know how to bet this one...

[Eye4Valu]

A remand in Perry now would turn everything around. We all know what is in those documents. The net worth sweep was intended to do one thing and one thing only-wipe out shareholders.

[muscleman]

**SEALED** OPINION AND ORDER granting 270 Motion to Compel. By no later than October 14, 2016, defendant shall file a memorandum with the court explaining why the court should not require defendant to pay plaintiffs' reasonable expenses incurred in making the motion, including attorney's fees. Signed by Judge Margaret M. Sweeney. (sp) (Entered: 09/20/2016)

 

Anyone confirm?

 

What is this 270 motion to compel? Is that the motion for releasing all the documents?

[Guest cherzeca]

**SEALED** OPINION AND ORDER granting 270 Motion to Compel. By no later than October 14, 2016, defendant shall file a memorandum with the court explaining why the court should not require defendant to pay plaintiffs' reasonable expenses incurred in making the motion, including attorney's fees. Signed by Judge Margaret M. Sweeney. (sp) (Entered: 09/20/2016)

 

Anyone confirm?

 

What is this 270 motion to compel? Is that the motion for releasing all the documents?

 

read the link in my post 4 posts up

[Guest cherzeca]

to beat a dead horse, this is what cooper & kirk asked for:

 

For the foregoing reasons, this Court should:  (1) to the extent that the documents in question are not covered by any other privilege, direct Defendant to produce deliberative process privilege documents listed in Exhibit 1 because Defendant has not properly asserted that privilege;  (2)order that documents that are relevant to Defendant’s purposes, intentions, and motivations for imposing the Net Worth Sweep are not covered by the deliberative process privilege or that Plaintiffs’ need for such documents is sufficient to overcome the qualified privilege; (3) order that documents shared with or produced by FHFA may not be withheld under the deliberative process privilege; 4) order that documents that discuss the Net Worth Sweep and were created after its imposition are not predecisional and therefore may not be withheld under the deliberative process privilege, or that Plaintiffs’ need for those documents overcomes the qualified privilege; (5) order that financial data, models, and projections are not deliberative and therefore may not be withheld under the deliberative process privilege, or that Plaintiffs’ need for those documents overcomes the qualified privilege; (6) to the extent that the Court does not otherwise order all deliberative process privilege documents listed in Exhibit 1 produced, review those documents in camera and determine whether they are deliberative and predecisional and whether Plaintiffs’ need for them overcomes the qualified privilege; (7) order that FHFA’s communications with the Companies are not protected by the bank examination privilege, especially where those communications occurred while the Companies were under FHFA’s control during conservatorship; (8 to the extent that it rules that FHFA may assert the bank examination privilege over documents listed in Exhibit 1, review those documents in camera to determine whether Defendant has properly asserted the privilege and whether Plaintiffs’ need for the documents in question overcomes the privilege;  (9) review in camera the documents listed in Exhibit 1 as withheld under the presidential communications privilege and determine whether Defendant has properly asserted the privilege; and(10)order Defendant to re-assess all of its privilege claims in light of the Court’s decision and to produce all documents that are not genuinely privileged.

 

how much of this did sweeney specifically order?  we shall see when her order is redacted and seal lifted

[Steve_Berk]

There are a bunch of options for the defendant to appeal the order, if they have indeed been ordered to turn over materials. They can appeal the disclosure order at the end of litigation (which of course isn't very appealing)--they'd typically do this and request to vacate any adverse judgment and remand for a new trial excluding the privileged material. Or they could ask the court to certify an interlocutory appeal and petition the court of appeals to accept it. Or they can petition an appellate court for a writ of mandamus. Or they can be really risky and just defy the disclosure order and get sanctioned and then appeal the sanction (obviously the riskiest move).

 

couple things.

 

first since order is sealed it isnt clear on its face which docs it applies to.  but i have attached docket#272, which is the redacted motion for #270, which sweeney just granted.  in #272, cooper & kirk argue against ALL assertions of privilege, so i dont think it is a leap to conclude that sweeney just struck down all govt privilege claims...full monty!

 

second, yes i think an order to govt explaining why attys fees should not be paid is a shot across the govt's bow, as in dont try an interlocutory appeal of this motion.

 

which gets me to three, @steve and @merk, can govt appeal before producing docs for Ps?

 

https://www.dropbox.com/s/zwdjcliu6d7qmua/redacted%20fairholme%20motion%20to%20compel.pdf?dl=0

[Guest cherzeca]

There are a bunch of options for the defendant to appeal the order, if they have indeed been ordered to turn over materials. They can appeal the disclosure order at the end of litigation (which of course isn't very appealing)--they'd typically do this and request to vacate any adverse judgment and remand for a new trial excluding the privileged material. Or they could ask the court to certify an interlocutory appeal and petition the court of appeals to accept it. Or they can petition an appellate court for a writ of mandamus. Or they can be really risky and just defy the disclosure order and get sanctioned and then appeal the sanction (obviously the riskiest move).

 

couple things.

 

first since order is sealed it isnt clear on its face which docs it applies to.  but i have attached docket#272, which is the redacted motion for #270, which sweeney just granted.  in #272, cooper & kirk argue against ALL assertions of privilege, so i dont think it is a leap to conclude that sweeney just struck down all govt privilege claims...full monty!

 

second, yes i think an order to govt explaining why attys fees should not be paid is a shot across the govt's bow, as in dont try an interlocutory appeal of this motion.

 

which gets me to three, @steve and @merk, can govt appeal before producing docs for Ps?

 

https://www.dropbox.com/s/zwdjcliu6d7qmua/redacted%20fairholme%20motion%20to%20compel.pdf?dl=0

 

thanks steve. 

 

correct me if i am wrong, but i would think that all options are low probability of success, assuming sweeney has written an intelligent opinion.  i say that because this is a mixed question of law and fact, and the law says balance in effect (meaning US v Nixon said weigh the competing interests so i assume sweeney just followed sirica), and the facts are in camera and i dont see an appeals court wanting to get the docs for their review.

 

are you sure there is a right to appeal on an interlocutory basis here?  seems to me govt will ask, but not clear govt is entitled.

 

stonewalling would create a saturday night massacre redux, for which i would have to get popcorn to fully appreciate.

[muscleman]

I find it funny that John Carney is totally blind about this new major development!  ;D

[muscleman]

There are a bunch of options for the defendant to appeal the order, if they have indeed been ordered to turn over materials. They can appeal the disclosure order at the end of litigation (which of course isn't very appealing)--they'd typically do this and request to vacate any adverse judgment and remand for a new trial excluding the privileged material. Or they could ask the court to certify an interlocutory appeal and petition the court of appeals to accept it. Or they can petition an appellate court for a writ of mandamus. Or they can be really risky and just defy the disclosure order and get sanctioned and then appeal the sanction (obviously the riskiest move).

 

couple things.

 

first since order is sealed it isnt clear on its face which docs it applies to.  but i have attached docket#272, which is the redacted motion for #270, which sweeney just granted.  in #272, cooper & kirk argue against ALL assertions of privilege, so i dont think it is a leap to conclude that sweeney just struck down all govt privilege claims...full monty!

 

second, yes i think an order to govt explaining why attys fees should not be paid is a shot across the govt's bow, as in dont try an interlocutory appeal of this motion.

 

which gets me to three, @steve and @merk, can govt appeal before producing docs for Ps?

 

https://www.dropbox.com/s/zwdjcliu6d7qmua/redacted%20fairholme%20motion%20to%20compel.pdf?dl=0

 

thanks steve. 

 

correct me if i am wrong, but i would think that all options are low probability of success, assuming sweeney has written an intelligent opinion.  i say that because this is a mixed question of law and fact, and the law says balance in effect (meaning US v Nixon said weigh the competing interests so i assume sweeney just followed sirica), and the facts are in camera and i dont see an appeals court wanting to get the docs for their review.

 

are you sure there is a right to appeal on an interlocutory basis here?  seems to me govt will ask, but not clear govt is entitled.

 

stonewalling would create a saturday night massacre redux, for which i would have to get popcorn to fully appreciate.

 

Regarding the appeal, even if it is difficult to reverse this decision, how much longer will government be able to drag this on? I assume at this point the only thing Obama cares about is how to drag it through January 1st 2017 right?

 

 

[Eye4Valu]

I think the Defendants will find Judge Sweeney increasingly irritable, to put it mildly, if they defy her order and/or continue to delay the proceedings in her court. Awarding the Plaintiffs their attorney's fees could be just the beginning. I think Tim Pagliara demonstrated his legal sophistication on Twitter when he put "Can you spell S-A-N-C-T-I-O-N-S."

 

On another note, something that came to my mind that I thought was beneficial to the Plaintiffs was that Judge Sweeney has been reviewing the sample of documents upon which various assertions of privilege are being claimed. In doing so, she is reviewing and getting to know the evidence in this case in depth. She is going to know more about it than any other judge thus far. That can't hurt our cause in her court, as those documents are likely explicit in the Defendant's plot to prevent shareholders from obtaining monetary recompense.

[Guest cherzeca]

I think the Defendants will find Judge Sweeney increasingly irritable, to put it mildly, if they defy her order and/or continue to delay the proceedings in her court. Awarding the Plaintiffs their attorney's fees could be just the beginning. I think Tim Pagliara demonstrated his legal sophistication on Twitter when he put "Can you spell S-A-N-C-T-I-O-N-S."

 

On another note, something that came to my mind that I thought was beneficial to the Plaintiffs was that Judge Sweeney has been reviewing the sample of documents upon which various assertions of privilege are being claimed. In doing so, she is reviewing and getting to know the evidence in this case in depth. She is going to know more about it than any other judge thus far. That can't hurt our cause in her court, as those documents are likely explicit in the Defendant's plot to prevent shareholders from obtaining monetary recompense.

 

we will have to wait for redacted order, so this is still spec, but to extent she overrides executive privilege, she specifically has to find that the probative or evidentiary value of the document outweighs POTUS's interest in not having it be discovered.  so absolutely she got into the docs and read carefully what they said, and made a judgment about what they meant to the case.

[deadspace]

Is there any possibility these documents could be made available to the Perry appeal

 

It would be a shame to have them rule without all available documents

[Mephistopheles]

Let's say she is willing to release all 11,000 documents. What are the chances govt willing to settle? The folks in the Obama administration (current and former) aren't going to be happy having all these emails public.

[Sunrider]

I always wondered how you settle a case like this (well actually multiple cases) - usually that involves no admission of guilt/wrongdoing. So for the breach of contract settlement means .... Oops, we're sorry, shouldn't have done the NWS but still think it was perfectly legal and will now pay the money back to Fannie and Freddie for their boards to decide what to do with it?

 

For the takings? We didn't do anything wrong in taking your stuff away but we'll give it back to you anyway?

 

Remember, it's not as though the government can simply pay the suing shareholders and do a side transaction purchasing their prefs but not those of other shareholders (apart from the fact that technical it would have to be the GSEs buying, who don't have the capital as it would look very odd for the government ot buy in the prefs).

 

Maybe our legal minds on the board have a better view on how this might work but for me it always seemed like the cases will either be won or lost, there is no settlement legal ground as such ...?

 

Let's say she is willing to release all 11,000 documents. What are the chances govt willing to settle? The folks in the Obama administration (current and former) aren't going to be happy having all these emails public.

[investorG]

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.

[Guest cherzeca]

a settlement would have to be global among all Ps. likely take form of a 4th A to SPSP agt that gets Ps to where they want to be.  ? is whether there would be some agt on ending C...