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


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Guest cherzeca

carney speculates millett is writing opinion, since brown just wrote and ginsburg is senior. any thoughts on whether this matters?

 

@hard

 

who writes the opinion gets to flesh out the meaning of the decision.  this is especially important if there is not a reversal (or affirmance) but a remand.  on remand, lamberth is going to wonder, ok, now what do i do?  the appeals court judges understand this and will be responsible for giving lamberth direction, guidance and standards to apply.

 

if there is to be remand, there may very well be a struggle going on about now (especially between millet and brown, who are rather polar opposites) on what standards to adopt and direction to give (and even language used in doing so), and so there may be many drafts, leading to a longer wait, even if there is a unanimous result, and even multiple opinions (for example, a ginsburg opinion, in which brown joins, and a millet opinion, concurring in the result only, but setting forth her own language).

 

all spec of course

 

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Guest cherzeca

I really hope we get reversal although we probably won't. Remand would be nice and I'm sure the shares will pop until we realize that now what, another 2 years for the new decision? Going to be rather anti climatic.

 

agreed, but dont forget, perry isnt the only game in town.  if there is remand in perry, there likely will be much in the opinion that may be helpful for plaintiffs in hines/jacobs; that court would not be obliged to follow perry opinion, but it would be influential.

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I really hope we get reversal although we probably won't. Remand would be nice and I'm sure the shares will pop until we realize that now what, another 2 years for the new decision? Going to be rather anti climatic.

 

agreed, but dont forget, perry isnt the only game in town.  if there is remand in perry, there likely will be much in the opinion that may be helpful for plaintiffs in hines/jacobs; that court would not be obliged to follow perry opinion, but it would be influential.

 

Talking about the DE case, it is moving extremely slowly. Nearly two months after lift, not even a date came out.

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Guest cherzeca

here is the opinion. i've just skimmed over it, but it seems important and potentially problematic

 

 

Pagliara suit dismissed.  Does this impact the Hindes/Jacobs case in Delaware in any way?

 

first, it is the Va. suit. second, it citers approvingly to lamberth's opinion in perry. third, no mention of piszel.  not helpful, of course, but not that harmful.

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i've read over parts of it more carefully now. Not as bad as I originally thought, but still bad, more in a cumulative way. Cites to Perry and also analyzes HERA in a very broad way--doesn't say that HERA altogether prohibits direct suits, but says that the specific rights or inspecting corporate records is one that was transferred to the conservator under HERA. in other words, the court is saying that the plaintiff doesn't even possess the rights that he believes were infringed. It's a broad reading of HERA and requires and the court pretty much says that unless there's a specific exception listed, they aren't going to read it into the statute.

 

 

here is the opinion. i've just skimmed over it, but it seems important and potentially problematic

 

 

Pagliara suit dismissed.  Does this impact the Hindes/Jacobs case in Delaware in any way?

 

first, it is the Va. suit. second, it citers approvingly to lamberth's opinion in perry. third, no mention of piszel.  not helpful, of course, but not that harmful.

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i've read over parts of it more carefully now. Not as bad as I originally thought, but still bad, more in a cumulative way. Cites to Perry and also analyzes HERA in a very broad way--doesn't say that HERA altogether prohibits direct suits, but says that the specific rights or inspecting corporate records is one that was transferred to the conservator under HERA. in other words, the court is saying that the plaintiff doesn't even possess the rights that he believes were infringed. It's a broad reading of HERA and requires and the court pretty much says that unless there's a specific exception listed, they aren't going to read it into the statute.

 

 

here is the opinion. i've just skimmed over it, but it seems important and potentially problematic

 

 

Pagliara suit dismissed.  Does this impact the Hindes/Jacobs case in Delaware in any way?

 

first, it is the Va. suit. second, it citers approvingly to lamberth's opinion in perry. third, no mention of piszel.  not helpful, of course, but not that harmful.

 

In a way havent we already seen some of the corporate records via Fairhlome's lawsuit? And more importantly Fairhlome's(Perry) lawyers.

 

To me Pagliara wants to see them as a shareholder and not a lawyer representing the shareholders. <- Is this assumption wrong?

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Guest cherzeca

i've read over parts of it more carefully now. Not as bad as I originally thought, but still bad, more in a cumulative way. Cites to Perry and also analyzes HERA in a very broad way--doesn't say that HERA altogether prohibits direct suits, but says that the specific rights or inspecting corporate records is one that was transferred to the conservator under HERA. in other words, the court is saying that the plaintiff doesn't even possess the rights that he believes were infringed. It's a broad reading of HERA and requires and the court pretty much says that unless there's a specific exception listed, they aren't going to read it into the statute.

 

 

here is the opinion. i've just skimmed over it, but it seems important and potentially problematic

 

 

Pagliara suit dismissed.  Does this impact the Hindes/Jacobs case in Delaware in any way?

 

first, it is the Va. suit. second, it citers approvingly to lamberth's opinion in perry. third, no mention of piszel.  not helpful, of course, but not that harmful.

 

right. this is a district court judge echoing lamberth (his peer). i'll start to worry if the perry appeals court does likewise.

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pag didnt seem to have a strong case to begin with:

 

HERA’s plain language evidences Congress’s intent to transfer as much power as possible to the FHFA when acting as Freddie Mac’s conservator.  Within that context, the Court may only reasonably read the transfer of “all rights, titles, powers, and privileges” of “any stockholder . . . with respect to the regulated entity and the assets of the regulated entity” to include a stockholder’s right to inspect Freddie Mac’s corporate records

 

jacobs/hindes in contrast argues that the nws assumes powers that never existed under dcgl

 

i worry though that breach of k claims will suffer the same demise, as "all rights" is interpreted to include stockholders' rights to dividends

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Guest cherzeca

pag didnt seem to have a strong case to begin with:

 

HERA’s plain language evidences Congress’s intent to transfer as much power as possible to the FHFA when acting as Freddie Mac’s conservator.  Within that context, the Court may only reasonably read the transfer of “all rights, titles, powers, and privileges” of “any stockholder . . . with respect to the regulated entity and the assets of the regulated entity” to include a stockholder’s right to inspect Freddie Mac’s corporate records

 

jacobs/hindes in contrast argues that the nws assumes powers that never existed under dcgl

 

i worry though that breach of k claims will suffer the same demise, as "all rights" is interpreted to include stockholders' rights to dividends

 

@berk/@merk  do you remember any judicial discussion during perry oral argument as to whether this language precluded Ps from bringing any direct claims?  there was plenty of discussion re threshold issues, even going to the HERA 4263 provision that no one briefed.  doesn't it make sense that this portion of the govt's brief, that Ps have no rights as shareholders because all means all, would have garnered more attention if one thinks it is to be followed by perry appeals court?

 

[EDIT:  indeed, the whole discussion of 4263 leads me to believe that if the appeals court was really troubled by the anti-injunction bar or the transfer of ALL shareholder rights bar, it would have spent time on these aspects of lamberth's opinion, and not try to figure out if everybody missed 4263 as a bar.]

 

@hard  Ps make a distinction between direct claims and derivative claims. the "with respect to" language seems to bar derivative claims, but courts have read a conflict exception that govt says is in error. only now when defending nws does govt claim that this language bars direct claims.  this would be quite a leap for perry appeals court to make...not saying that millett isnt ready to make it but i would be surprised if ginsburg was ready to make it when he didnt mention it during orals but was careful enough to mention 4263 during orals.

 

if you think about it, a books and records inspection right is much more of a right with respect to the issuer, akin to a derivative right to sue in name of issuer, than bringing a direct claim.  while i thought pagliara had a good case, it is clear that books and records inspection is closer to the derivative claim right than a direct claim right.

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the pag opinion discuss this direct vs derivative distinction on pg 17 and concludes on pg 19:

 

The present case, however, questions whether a stockholder possesses the underlying right that he seeks to enforce through a direct lawsuit.  In other words, the issue here is not whether Pagliara may pursue his right through a direct lawsuit, but whether he possesses the right he believes was infringed.

 

pag fails as a direct claim because that right to inspect records was transferred away by HERA

 

breach of k direct claims would suffer the same demise if similarly, the right to dividends was transferred away by HERA (despite lockharts statements on the contrary)

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@cherzeca, IIRC, there was no discussion that the direct claims were taken away because that would have automatically implicated the Takings clause

 

@hardincap, same response as above -- if the direct claims were taken, then based on Piszel, we have a Takings clause issue

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Guest cherzeca

agreed, but the takings case is like 5 years away :(

 

@hard

 

point is that courts assume that congress didnt intend a takings unless there is very clear language to do so.  dont forget what hume argued about winstar cases.  billions of dollars were awarded to winstar Ps under the fdic act, which contains the same language as HERA.  no one said anything about those Ps not being able to bring those cases in federal court, but only in court of claims. fdic didnt even argue that.  the reading you fear would be an abrupt change in the manner in which the dc circuit court of appeals has dealt with language (at least implicitly) over decades (winstar in 1980s)

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@cherzeca i hope thats right, but im reminded of this statement by lamberth: "It is a slippery slope for the Court to poke holes in, or limit, the plain language of a statute, especially when, as here, the plaintiffs have not asked the Court to weigh in on the statute’s constitutionality."

 

@luke i was joking, but given how slowly things seem to be going in sweeney's court, i dont expect anything substantial to come out for quite some time

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Slow in Sweeney's court

Slow in Sleet's court

Nerve wracking wait for appeal decision

 

Could Sweeney and Sleet be purposefully delaying to see what Ginsgburg and co say? If so that doesn't sound like a good sign.

 

And then there's the Kentucky case with the recused judge, and no update from new judge.

 

Getting kind of burned out waiting around like this. Justice delayed might as well be justice denied.

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no surprise, but counsel for FHFA has sent a letter to the Perry court about the Pagliara decision. Emphasizing that the Pagliara court said that HERA evidences congress's intention to transfer as much power to the conservator as possible and that the court rejected any conflict-of-interest exception to the Conservator’s succession to stockholder rights to bring a derivative suit.

pagletter.pdf

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no surprise, but counsel for FHFA has sent a letter to the Perry court about the Pagliara decision. Emphasizing that the Pagliara court said that HERA evidences congress's intention to transfer as much power to the conservator as possible and that the court rejected any conflict-of-interest exception to the Conservator’s succession to stockholder rights to bring a derivative suit.

 

I notice that they stopped short of saying that direct claims were transferred.

 

I think there are too many cooks in this kitchen. On balance, the Pagliara thing is a negative. Not a huge one, but one we probably could have done without.

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no surprise, but counsel for FHFA has sent a letter to the Perry court about the Pagliara decision. Emphasizing that the Pagliara court said that HERA evidences congress's intention to transfer as much power to the conservator as possible and that the court rejected any conflict-of-interest exception to the Conservator’s succession to stockholder rights to bring a derivative suit.

 

Yeah.... As I said before, with so many cases going on, some people argue that we just need to win one. But the cases are related. If we lose enough like this, there will be impacts on the remaining.

 

However I still expect the Appeals court to bring justice.

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