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

[Luke 532]

 

BLOOMBERG: *FANNIE-FREDDIE SHAREHOLDERS SCORE A WIN IN APPEALS COURT RULING

 

PLAINTIFFS WIN COLLINS ON APA CLAIM, SURVIVE MOTION TO DISMISS! REMANDED FOR FURTHER PROCEEDINGS!

 

JUDGE WILLET WROTE THE MAJORITY OPINION. NWS VIOLATED HERA. FINALLY! $FNMA

[stevevri]

I haven't read yet...

17-20364_Documents.pdf

[muscleman]

Wow that’s incredible. Congrats on those holding.

Can Chris share your thoughts on this please?

 

 

[Luke 532]

Carney's take...

https://twitter.com/carney/status/1170104322945892353

Long-awaited $FNMA 10th Circuit en banc decision just dropped.

 

Quick take-away:

1) Sends question of 3rd Amendment back to trial court.

2) Says FHFA director is unconstitutional but relief is prospective only; director now removable at will.

 

Shareholders survived dismissal.

---

I don't have a link to the opinions. Sorry. I'm sure one will be up in the usual places.

 

There are tons of battling opinions in this thing on the constitutional question. More general agreement on the claim that Net Worth Sweep question is "plausible"--meaning, goes to trial.

---

 

This creates a pretty severe split with several other circuits which upheld motions to dismiss. So the next step here is, presumably, the Supreme Court.

[Luke 532]

Can Chris share your thoughts on this please?

 

I've talked with him over e-mail... he's reading it now.

[Guest cherzeca]

I'm still reading it, some 120 pages, but by i) 9-7 majority, 5thC en banc reversed the dismissal of the APA claim and remanded to DCt (meaning the Ps can go to trial to prove that the conservator did not have authority to adopt NWS), and ii) by a separate 9-7 majority ruled that the single fhfa director removable for cause only provision was unconstitutional but that Ps are entitled only to prospective relief (so NWS not invalid as a matter of constitutional law).

 

both parties will likely appeal.

 

 

[hardincap]

sure seems like courts stalled until the release of the treasury report. congrats everyone! glad I kept every single share, hah

[muscleman]

I'm still reading it, some 120 pages, but by i) 9-7 majority, 5thC en banc reversed the dismissal of the APA claim and remanded to DCt (meaning the Ps can go to trial to prove that the conservator did not have authority to adopt NWS), and ii) by a separate 9-7 majority ruled that the single fhfa director removable for cause only provision was unconstitutional but that Ps are entitled only to prospective relief (so NWS not invalid as a matter of constitutional law).

 

both parties will likely appeal.

 

so this ruling did not give plaintiffs any relief as they requested? Instead it is a remand to lower court like the Perry case?

[Luke 532]

I'm still reading it, some 120 pages, but by i) 9-7 majority, 5thC en banc reversed the dismissal of the APA claim and remanded to DCt (meaning the Ps can go to trial to prove that the conservator did not have authority to adopt NWS), and ii) by a separate 9-7 majority ruled that the single fhfa director removable for cause only provision was unconstitutional but that Ps are entitled only to prospective relief (so NWS not invalid as a matter of constitutional law).

 

both parties will likely appeal.

 

Christian, thank you for your input. Do you think this leads to a settlement?

[investorG]

hello cherzeca, what is the rationale for offering a remand (what we apparently received) vs a full reversal where the en banc decides the nws is illegal? thank you

[orthopa]

Am I missing where relief is discussed? If the relief is prospective does that mean as much if the NWS was going to be stopped soon anyway?

[Guest cherzeca]

I'm still reading it, some 120 pages, but by i) 9-7 majority, 5thC en banc reversed the dismissal of the APA claim and remanded to DCt (meaning the Ps can go to trial to prove that the conservator did not have authority to adopt NWS), and ii) by a separate 9-7 majority ruled that the single fhfa director removable for cause only provision was unconstitutional but that Ps are entitled only to prospective relief (so NWS not invalid as a matter of constitutional law).

 

both parties will likely appeal.

 

so this ruling did not give plaintiffs any relief as they requested? Instead it is a remand to lower court like the Perry case?

 

IT VACATED THE DISMISSAL.  CLAIM IS ALIVE AND BASED UPON DECISION'S MAJORITY OPINION, THIS IS A VERY WINNABLE CASE FOR PS IF IT WERE EVER TO PROCEED TO TRIAL.  sorry for all caps, but just saying...

[Guest cherzeca]

I'm still reading it, some 120 pages, but by i) 9-7 majority, 5thC en banc reversed the dismissal of the APA claim and remanded to DCt (meaning the Ps can go to trial to prove that the conservator did not have authority to adopt NWS), and ii) by a separate 9-7 majority ruled that the single fhfa director removable for cause only provision was unconstitutional but that Ps are entitled only to prospective relief (so NWS not invalid as a matter of constitutional law).

 

both parties will likely appeal.

 

Christian, thank you for your input. Do you think this leads to a settlement?

 

it certainly affects the fhfa/treasury negotiation.  if you guys read the opinion, which I encourage, check out the text to footnotes 178-180

[Guest cherzeca]

hello cherzeca, what is the rationale for offering a remand (what we apparently received) vs a full reversal where the en banc decides the nws is illegal? thank you

 

@IG

 

Ps win on law.  however in a trial, there are facts that need to be presented.  one gets summary judgment only if there are no facts that could be presented which would justify the NWS under the law as enunciated by this opinion.  I still haven't finished the opinion, but based on what I read so far, it is very hard to see how Ps could lose at trial.  but you are correct, this decision did not in and of itself vacate the NWS

 

edit: put another way, the DCt said that taking the Ps factual allegations as true, Ps lose.  en banc majority essentially says taking Ps factual allegations as true Ps win.

 

now are Ps factually allegations true?  that is for the DCt to decide on remand.

[Luke 532]

Christian, thank you for your continued legal analysis!  You are an incredibly valuable member of this community.

[investorG]

hello cherzeca, what is the rationale for offering a remand (what we apparently received) vs a full reversal where the en banc decides the nws is illegal? thank you

 

@IG

 

Ps win on law.  however in a trial, there are facts that need to be presented.  one gets summary judgment only if there are no facts that could be presented which would justify the NWS under the law as enunciated by this opinion.  I still haven't finished the opinion, but based on what I read so far, it is very hard to see how Ps could lose at trial.  but you are correct, this decision did not in and of itself vacate the NWS

 

edit: put another way, the DCt said that taking the Ps factual allegations as true, Ps lose.  en banc majority essentially says taking Ps factually allegations as true Ps win.

 

now are Ps factually allegations true?  that is for the DCt to decide on remand.

 

thank you.  one more, please - unless the constitutional side is appealed and overturned at the supreme court, Calabria could / would get kicked out in jan2021 if a democrat wins the election?

[SnarkyPuppy]

Appreciate the timely insight cherz. 

 

Cheers to all.  Yet another foot forward in the right direction.  Just a matter of time. 

[Guest cherzeca]

hello cherzeca, what is the rationale for offering a remand (what we apparently received) vs a full reversal where the en banc decides the nws is illegal? thank you

 

@IG

 

Ps win on law.  however in a trial, there are facts that need to be presented.  one gets summary judgment only if there are no facts that could be presented which would justify the NWS under the law as enunciated by this opinion.  I still haven't finished the opinion, but based on what I read so far, it is very hard to see how Ps could lose at trial.  but you are correct, this decision did not in and of itself vacate the NWS

 

edit: put another way, the DCt said that taking the Ps factual allegations as true, Ps lose.  en banc majority essentially says taking Ps factually allegations as true Ps win.

 

now are Ps factually allegations true?  that is for the DCt to decide on remand.

 

thank you.  one more, please - unless the constitutional side is appealed and overturned at the supreme court, Calabria could / would get kicked out in jan2021 if a democrat wins the election?

 

who the F knows.  there is a split in the circuits...DC circuit upheld removable for cause en banc after a merits opinion invalidating it written by.....then judge kavaugh

[investorG]

hello cherzeca, what is the rationale for offering a remand (what we apparently received) vs a full reversal where the en banc decides the nws is illegal? thank you

 

@IG

 

Ps win on law.  however in a trial, there are facts that need to be presented.  one gets summary judgment only if there are no facts that could be presented which would justify the NWS under the law as enunciated by this opinion.  I still haven't finished the opinion, but based on what I read so far, it is very hard to see how Ps could lose at trial.  but you are correct, this decision did not in and of itself vacate the NWS

 

edit: put another way, the DCt said that taking the Ps factual allegations as true, Ps lose.  en banc majority essentially says taking Ps factually allegations as true Ps win.

 

now are Ps factually allegations true?  that is for the DCt to decide on remand.

 

thank you.  one more, please - unless the constitutional side is appealed and overturned at the supreme court, Calabria could / would get kicked out in jan2021 if a democrat wins the election?

 

who the F knows.  there is a split in the circuits...DC circuit upheld removable for cause en banc after a merits opinion invalidating it written by.....then judge kavaugh

 

ok, thanks.  seems like supreme court will need to decide this area whether the prez can fire the fhfa head for any reason.

[investorG]

cherzeca, last ones please (i think):?

 

what's the next step if no settlement - back to circuit court or govt appeal en banc to supreme court? 

 

if it goes back to circuit court, does it matter adversely to us that the judge is Clinton democrat?

 

thank you

[Gregmal]

For those of you who don't believe the game is rigged, is it odd that the same trading day of the announcement to release comes out, a court decision now emerges that gives even those most opposed to the release a reason to compromise?

[muscleman]

I'm still reading it, some 120 pages, but by i) 9-7 majority, 5thC en banc reversed the dismissal of the APA claim and remanded to DCt (meaning the Ps can go to trial to prove that the conservator did not have authority to adopt NWS), and ii) by a separate 9-7 majority ruled that the single fhfa director removable for cause only provision was unconstitutional but that Ps are entitled only to prospective relief (so NWS not invalid as a matter of constitutional law).

 

both parties will likely appeal.

 

so this ruling did not give plaintiffs any relief as they requested? Instead it is a remand to lower court like the Perry case?

 

IT VACATED THE DISMISSAL.  CLAIM IS ALIVE AND BASED UPON DECISION'S MAJORITY OPINION, THIS IS A VERY WINNABLE CASE FOR PS IF IT WERE EVER TO PROCEED TO TRIAL.  sorry for all caps, but just saying...

 

Thank you! I appreciate it!

 

[Guest cherzeca]

cherzeca, last ones please (i think):?

 

what's the next step if no settlement - back to circuit court or govt appeal en banc to supreme court? 

 

if it goes back to circuit court, does it matter adversely to us that the judge is Clinton democrat?

 

thank you

 

both parties will seek writ of certiorari from SCOTUS.  Ps lost relief on const claim 7-9 so it will want to have SCOTUS hear this, and fhfa will want to have SCOTUS hear both claims.  I expect

SCOTUS to grant cert on both claims.  if it does, then the 5th C decision is held in abeyance pending SCOTUS determination.  if SCOTUS doesn't grant cert, then it is unclear whether fhfa director is removable only for cause (circuit split), and the DCt holds a trial on Ps alleged facts on the APA claim

[Guest cherzeca]

For those of you who don't believe the game is rigged, is it odd that the same trading day of the announcement to release comes out, a court decision now emerges that gives even those most opposed to the release a reason to compromise?

 

I have alternative theory.  one of the 9 judges in the APA majority was hesitant to so rule if treasury came out with a 4thA...one judge asked about this in oral argument.  once he saw the treasury plan had nothing, he said ok let it go

[investorG]

cherzeca, last ones please (i think):?

 

what's the next step if no settlement - back to circuit court or govt appeal en banc to supreme court? 

 

if it goes back to circuit court, does it matter adversely to us that the judge is Clinton democrat?

 

thank you

 

both parties will seek writ of certiorari from SCOTUS.  Ps lost relief on const claim 7-9 so it will want to have SCOTUS hear this, and fhfa will want to have SCOTUS hear both claims.  I expect

SCOTUS to grant cert on both claims.  if it does, then the 5th C decision is held in abeyance pending SCOTUS determination.  if SCOTUS doesn't grant cert, then it is unclear whether fhfa director is removable only for cause (circuit split), and the DCt holds a trial on Ps alleged facts on the APA claim

 

ok, thanks.  not good.  waiting til may/june for a sc ruling puts too many eggs in 1 basket too late in the presidential term.