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

[hardincap]

perry and berkowitz appear to be in it to win it. Paying huge legal fees. It's the free riding hedge funds who pop in and out imo

 

fairholme reported 743k in total legal fees for the first half of the year - 1.5m annualized. Doesn't that seem a little low, considering hes got around two dozen lawyers working for his case?

 

[Guest cherzeca]

perry and berkowitz appear to be in it to win it. Paying huge legal fees. It's the free riding hedge funds who pop in and out imo

 

fairholme reported 743k in total legal fees for the first half of the year - 1.5m annualized. Doesn't that seem a little low, considering hes got around two dozen lawyers working for his case?

 

Very low. That might be just regulatory work for fund. He may be treating cooper/Kirk as an investment capitalized expense added to basis. I would expect CK to generate about $10MM annualized

 

Also there are additional plaintiffs to share costs but fairholme likely dwarfs other plaintiffs.

 

My experience with berkowitz (mbi v bac) is that he is patient, but once there is a win be blows it out like nobody's business

[hardincap]

perry and berkowitz appear to be in it to win it. Paying huge legal fees. It's the free riding hedge funds who pop in and out imo

 

fairholme reported 743k in total legal fees for the first half of the year - 1.5m annualized. Doesn't that seem a little low, considering hes got around two dozen lawyers working for his case?

 

Very low. That might be just regulatory work for fund. He may be treating cooper/Kirk as an investment capitalized expense added to basis. I would expect CK to generate about $10MM annualized

 

Also there are additional plaintiffs to share costs but fairholme likely dwarfs other plaintiffs.

 

My experience with berkowitz (mbi v bac) is that he is patient, but once there is a win be blows it out like nobody's business

 

to be fair, in '14 he recorded 3m in legal expenses and 2m in "misc" expenses

 

The Fund paid certain fees and expenses during the year, including legal and miscellaneous expenses, in connection with its

investments in the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.

[twacowfca]

Why would the ten percent compound?

 

 

That's the way the documents read.  The $188B the U.S. has put into F&F entitles the U.S. to receive 10% per annum on cumulative preferred shares.  Those accumulating dividends that have not been paid compound at 10% per annum, adding to what is owed the U.S.

 

Pro forma, what would be  owed the U.S. annually without the sweep is considerably more than $18.8 Billion, and the mountain of  arrears in addition to the $188 principal amount is growing at a rate of 10% per annum as we speak.

 

I think there was a deal in progress because certain leading Democrats issued clarifications recently that they were no longer adamantly opposed to giving the public preferred holders anything in some sort of reorganization.  F&F used to be the Democrat's champion cash cow to fund their political campaigns. The former chairman of Fannie Mae led Obama's fundraising in his 2008 campaign.

 

It seems that the Jumpstart bill puts that in check.  But that's not checkmate.  However, with the Jumpstart bill, I don't see a clear way for a significant recovery for preferred shareholders until 2018 at the earliest if ever.

 

I appreciate thoughtful comments, not wishful thinking about possibly favorable court decisions. How might a favorable settlement happen in view of the Government's preferred shares being ahead of the other shares, assuming there's not a dramatic, favorable court ruling for other shareholders.

 

 

 

[merkhet]

Why would the ten percent compound?

 

That's the way the documents read.  The $188B the U.S. has put into F&F entitles the U.S. to receive 10% per annum on cumulative preferred shares.  Those accumulating dividends that have not been paid compound at 10% per annum, adding to what is owed the U.S.

 

Pro forma, what would be owed the U.S. annually without the sweep is considerably more than $18.8 Billion, and the mountain of  arrears in addition to the $188 principal amount is growing at a rate of 10% per annum as we speak.

 

So that's what I was hoping to tease out with my question. Why would the dividends accumulate but for the sweep? Because but for the sweep, the companies were making tremendous profits (even aside from the mountain of non-cash DTAs that were recognized because of that profitability).

 

 

And the non-2013 profits above understate the companies' cash earning abilities because the DTAs would have kept cash taxes low, which means even more dividend paying capability for the GSEs. Alternatively, I suspect that, to the government, trading DTAs for dividends is probably just as good to them as cash, but that's a leap that doesn't need to be made because cash profitability would have been enough to continue to pay the $18B in dividends.

 

Am I missing something here?

 

I think there was a deal in progress because certain leading Democrats issued clarifications recently that they were no longer adamantly opposed to giving the public preferred holders anything in some sort of reorganization.  F&F used to be the Democrat's champion cash cow to fund their political campaigns. The former chairman of Fannie Mae led Obama's fundraising in his 2008 campaign.

 

Do you have a link to this? I'd be curious to see who that might have been.

 

It seems that the Jumpstart bill puts that in check.  But that's not checkmate.  However, with the Jumpstart bill, I don't see a clear way for a significant recovery for preferred shareholders until 2018 at the earliest if ever.

 

I appreciate thoughtful comments, not wishful thinking about possibly favorable court decisions. How might a favorable settlement happen in view of the Government's preferred shares being ahead of the other shares, assuming there's not a dramatic, favorable court ruling for other shareholders.

 

It looks to me that any settlement is going to have to come from the Administration because the Treasury holds the GSEs by the balls via the covenants in the SPSPA, and I'm not optimistic that this Administration would be willing to make any move unless forced to do so by some development in the legal courts. (Which is why I was asking for the reason you think a settlement might have been in the works.)

[Luke 532]

 

Mr. BROWN. I will say to my colleague from New York that it does not.

That is not the effect of the language. Any number of decisions could

be made after that date, when a new Congress and a new President will

be in place. Nor does this provision have any effect on the court cases

and settlements currently underway challenging the validity of the

third amendment. As the Senator from Tennessee said yesterday, ``this

legislation does not prejudice'' any of those cases.

 

Perhaps there have been some other leaks of a possible settlement.

 

First...

Attorney Cooper in August says the next step is to collect the information and prepare documents for filing in the U.S. Court of Appeals. There is no timeline on that, but Cooper hopes the government will mediate. "We reached our hand out to the government," Cooper says. "We would like to do that, [but] so far to no avail. I still hold out some hope the government may agree to resolve this dispute amicably."

 

Didn't I read somewhere a few months ago that Sweeney encouraged the two sides to mediate?  Perhaps that's standard.  I'm not sure where I may have read this but I thought I did in some filing.

 

Second...

The Political Alpha piece from October. See PDF embedded within this article: http://nypost.com/2015/10/08/a-white-house-flip-flop-on-fannie-and-freddie-investors-think-so/

 

Third...

The government has been active the past 2 months in hiring consultants.  They could be for any reason but their bios include damages, valuation, etc.

 

Seems interesting given Brown's recent comments. Thoughts?

[doughishere]

Ive also watched and re-watched Corkers speech Dec. 17th and I just feel like its a bit of a swan song.

 

Listen to what he says: "While I believe that recap-and-release is totally inappropriate, I do understand that the hedge funds still have claims to deal with in court, and this legislation does not prejudice those claims." is he signaling to his constituents that he disagrees with something thats about to go down? Could be a loss in the courts or a settlement but he is well aware of the Hedge Funds claims. That sounds like he hedging his bet to me especially when he has been so adamant against them in the first place...

 

Then he goes on and on and on about how well the hedge funds are doing if they win. I mean he actually calculates the profits that they are going to make....thats an awful envious thing to do in front of congress. It sounds like hes put more thought into calculating the hedge fund profits then he has his own taxes.

 

And why not push for something stronger? When he's taken such a hard line for so many years why give even a little ground like that?  Why speak out against the Hedge Funds so much then push an Omnibus that essentially does nothing to stop them? Seems strange. I think hes on the ropes and the best thing he can do is make a Omnibus that locks in a sweet 10% dividend for at least the next 2 years?

[doughishere]

Didn't I read somewhere a few months ago that Sweeney encouraged the two sides to mediate?  Perhaps that's standard.  I'm not sure where I may have read this but I thought I did in some filing.

 

Did anyone out there read the same thing some where? Anyone know if there is a source for this?

[orthopa]

I find the whole thing fascinating and wish I had more to add other then just speculation. FWIW it appears going forward all the court cases can do is push FNF more towards a release/settlement/recap etc, etc. Unless of course there is a big set back but at a minimum Sweenys court and the Delaware court seem very promising.

 

This investment for me is still either still a moderate to big win or a complete loss and even with my limited legal knowledge I'm still OK holding with what has transpired. If anything I'm more interested now that the price has dropped. I didn't expect a settlement soon and I'm Ok waiting till 2018 if need be.

[twacowfca]

Why would the ten percent compound?

 

That's the way the documents read.  The $188B the U.S. has put into F&F entitles the U.S. to receive 10% per annum on cumulative preferred shares.  Those accumulating dividends that have not been paid compound at 10% per annum, adding to what is owed the U.S.

 

Pro forma, what would be owed the U.S. annually without the sweep is considerably more than $18.8 Billion, and the mountain of  arrears in addition to the $188 principal amount is growing at a rate of 10% per annum as we speak.

 

So that's what I was hoping to tease out with my question. Why would the dividends accumulate but for the sweep? Because but for the sweep, the companies were making tremendous profits (even aside from the mountain of non-cash DTAs that were recognized because of that profitability).

 

 

And the non-2013 profits above understate the companies' cash earning abilities because the DTAs would have kept cash taxes low, which means even more dividend paying capability for the GSEs. Alternatively, I suspect that, to the government, trading DTAs for dividends is probably just as good to them as cash, but that's a leap that doesn't need to be made because cash profitability would have been enough to continue to pay the $18B in dividends.

 

Am I missing something here?

 

I think there was a deal in progress because certain leading Democrats issued clarifications recently that they were no longer adamantly opposed to giving the public preferred holders anything in some sort of reorganization.  F&F used to be the Democrat's champion cash cow to fund their political campaigns. The former chairman of Fannie Mae led Obama's fundraising in his 2008 campaign.

 

Do you have a link to this? I'd be curious to see who that might have been.

 

It seems that the Jumpstart bill puts that in check.  But that's not checkmate.  However, with the Jumpstart bill, I don't see a clear way for a significant recovery for preferred shareholders until 2018 at the earliest if ever.

 

I appreciate thoughtful comments, not wishful thinking about possibly favorable court decisions. How might a favorable settlement happen in view of the Government's preferred shares being ahead of the other shares, assuming there's not a dramatic, favorable court ruling for other shareholders.

 

It looks to me that any settlement is going to have to come from the Administration because the Treasury holds the GSEs by the balls via the covenants in the SPSPA, and I'm not optimistic that this Administration would be willing to make any move unless forced to do so by some development in the legal courts. (Which is why I was asking for the reason you think a settlement might have been in the works.)

 

I think both Pelosi and Reid both issued statements several days ago back pedaling on their previous opposition to any deal that would give something to the public preferred holders or the common holders. When that happened it looked like there might be something nice in prospect for public preferred holders, and I considered getting back in for our fourth possibly multi bagger round trip.  However, the Jumpstart bill seems to throw a monkey wrench into the works.

 

With the loss from their balance sheet of the funds taken in the sweep, dividends would not prudently  be paid to the public preferred holders until that balance sheet is rebuilt.  Profits are now normalizing for F&F, and their latest year's earnings don't even provide enough to pay the annual dividends on the U.S. preferred,according to the chart.

 

Does anyone think the Administration is going to return the swept profits to F&F and restore their balance sheets?  In an election year? Would that help their election chances next fall?  If the answer is yes, well --- there's this bridge over an important river I would like to sell you.

 

I am not seeking confirmation of my latest view. I would be delighted to hear a credible way the administration can cut a deal now that is favorable to preferred holders.

[Luke 532]

I think both Pelosi and Reid both issued statements several days ago...

 

Twa, do you happen to have a link to those statements?  Would be greatly appreciated.  Many thanks.

[Guest cherzeca]

i have nothing particular to add about the settlement discussion other than to say that, if the treasury was disposed to consider settlement, and there is nothing public that would lead one to that conclusion, although settlement discussions could very well be occurring on a back channel, plausible deniability basis for all i know, then it wouldn't make sense for treasury to settle unless all litigation parties signed off and all litigation was dismissed.  assuming that any settlement that treasury would accept would be less than what plaintiffs would get from a complete invalidation of 3rd A, i would think this would be very difficult to get unanimous agreement to.  so, given that this has become a multi-party game, the issues surrounding collective action problems would surface.  just the mechanics of a settlement would be very difficult unless, again, treasury is willing to give plaintiffs essentially everything they could get in courts.

[doughishere]

@cherzeca

 

Aww...taking the wind out of my speculation on a settlement.

[orthopa]

Why would the ten percent compound?

 

That's the way the documents read.  The $188B the U.S. has put into F&F entitles the U.S. to receive 10% per annum on cumulative preferred shares.  Those accumulating dividends that have not been paid compound at 10% per annum, adding to what is owed the U.S.

 

Pro forma, what would be owed the U.S. annually without the sweep is considerably more than $18.8 Billion, and the mountain of  arrears in addition to the $188 principal amount is growing at a rate of 10% per annum as we speak.

 

So that's what I was hoping to tease out with my question. Why would the dividends accumulate but for the sweep? Because but for the sweep, the companies were making tremendous profits (even aside from the mountain of non-cash DTAs that were recognized because of that profitability).

 

 

And the non-2013 profits above understate the companies' cash earning abilities because the DTAs would have kept cash taxes low, which means even more dividend paying capability for the GSEs. Alternatively, I suspect that, to the government, trading DTAs for dividends is probably just as good to them as cash, but that's a leap that doesn't need to be made because cash profitability would have been enough to continue to pay the $18B in dividends.

 

Am I missing something here?

 

I think there was a deal in progress because certain leading Democrats issued clarifications recently that they were no longer adamantly opposed to giving the public preferred holders anything in some sort of reorganization.  F&F used to be the Democrat's champion cash cow to fund their political campaigns. The former chairman of Fannie Mae led Obama's fundraising in his 2008 campaign.

 

Do you have a link to this? I'd be curious to see who that might have been.

 

It seems that the Jumpstart bill puts that in check.  But that's not checkmate.  However, with the Jumpstart bill, I don't see a clear way for a significant recovery for preferred shareholders until 2018 at the earliest if ever.

 

I appreciate thoughtful comments, not wishful thinking about possibly favorable court decisions. How might a favorable settlement happen in view of the Government's preferred shares being ahead of the other shares, assuming there's not a dramatic, favorable court ruling for other shareholders.

 

It looks to me that any settlement is going to have to come from the Administration because the Treasury holds the GSEs by the balls via the covenants in the SPSPA, and I'm not optimistic that this Administration would be willing to make any move unless forced to do so by some development in the legal courts. (Which is why I was asking for the reason you think a settlement might have been in the works.)

 

I think both Pelosi and Reid both issued statements several days ago back pedaling on their previous opposition to any deal that would give something to the public preferred holders or the common holders. When that happened it looked like there might be something nice in prospect for public preferred holders, and I considered getting back in for our fourth possibly multi bagger round trip.  However, the Jumpstart bill seems to throw a monkey wrench into the works.

 

With the loss from their balance sheet of the funds taken in the sweep, dividends would not prudently  be paid to the public preferred holders until that balance sheet is rebuilt.  Profits are now normalizing for F&F, and their latest year's earnings don't even provide enough to pay the annual dividends on the U.S. preferred,according to the chart.

 

Does anyone think the Administration is going to return the swept profits to F&F and restore their balance sheets?  In an election year? Would that help their election chances next fall?  If the answer is yes, well --- there's this bridge over an important river I would like to sell you.

 

I am not seeking confirmation of my latest view. I would be delighted to hear a credible way the administration can cut a deal now that is favorable to preferred holders.

 

Well theoretically there are 2 ways this can work out for shareholders.

 

1. The administration sees enough evidence or tries to save face and settle.

 

2. Gov is forced by court decision to work out settlement or return funds. This of course could be appealed but if any of the courts find the net sweep, delaware preferred law illegal etc funds have to be return regardless of the omnibus bill, what the administration thinks etc  correct?

 

It may not be this administration but eventually whoever is the president may not have a say in what $$$ is given back and how much.

[doughishere]

CASE TIMELINE UPDATE as of 12/29/2015

 

Fairholme

 

ORDER

 

On December 24, 2015, defendant in the above-captioned case filed a second motion to

enlarge the deadline for responding to plaintiffs’ motion to compel certain documents withheld

for privilege. Defendant requests a ten-day enlargement of time due to the effect that the holiday

season is having on its ability to coordinate among multiple agencies and conduct an internal

review, and represents that plaintiffs oppose its motion.

 

For good cause shown, defendant’s motion is GRANTED.

 

Defendant shall file its response to plaintiff’s motion to compel by no

later than Thursday, January 21, 2016.

 

http://gselinks.com/Court_Filings/Fairholme/13-465-0281.pdf

 

----------------------------------------------------------

 

Jacob and Hindes (Delaware)

 

....WHEREAS, Defendants' Motions to Dismiss will be fully briefed by February 16, 2016;

WHEREAS, the Parties agree that the Parties' positions on the Joint Status Report issues of Jurisdiction, Identification and Narrowing of the Issues, Relief, Discovery, Trial Length and Settlement are all dependant on the resolution of Defendants' Motions to Dismiss; WHEREAS, the Parties do not currently anticipate discovery in this matter proceeding pending the Court's resolution of Defendants' Motions to Dismiss;

 

NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED, subject to the

approval and Order of the Court, that the Parties shall have until 30 days after the Court decides Defendants' Motions to Dismiss to submit a Joint Status Report and Proposed Scheduling Order for the Court's consideration. The Parties further stipulate and agree, subject to the approval and Order of the Court, that no discovery requests shall be served by either party pending the Court's decision on Defendants' Motions to Dismiss. The Parties reserve the right to seek relief from this Stipulation and Proposed Order by further stipulation or motion.

 

http://www.gselinks.com/Court_Filings/Jacobs_Hindes/15-00708-0022.pdf

 

----------------------------------------------------------

 

Perry

 

O R D E R

Upon consideration of appellees’ unopposed motion for extension of time to file its briefs, it is

 

ORDERED that the motion be granted. The following revised briefing schedule will now apply in this case:

 

Appellees' Brief(s) December 21, 2015

 

Appellants' Reply Brief(s) February 2, 2016

 

Deferred Appendix February 16, 2016

 

Final Briefs March 8, 2016

 

http://www.gselinks.com/Court_Filings/Perry/14-5243-1583683.pdf

[Luke 532]

There is a TON going on within the next 60 days.  Nearly 8:1 odds on FNMAS, even better on some other prefs (12:1 on FMCCL, 10:1 on FNMAH, etc.).  Needless to say, I like the situation a lot.

[Luke 532]

What do you all make of the new bonds that both Light and Carney commented on today?

 

Joe Light...  Fannie and Freddie Give Birth to New Mortgage Bond

http://www.wsj.com/articles/fannie-and-freddie-give-birth-to-new-mortgage-bond-1451385003

 

John Carney... Fannie and Freddie: New Bonds With an Old Twist

http://www.wsj.com/articles/fannie-and-freddie-new-bonds-with-an-old-twist-1451422238

 

[twacowfca]

Why would the ten percent compound?

 

That's the way the documents read.  The $188B the U.S. has put into F&F entitles the U.S. to receive 10% per annum on cumulative preferred shares.  Those accumulating dividends that have not been paid compound at 10% per annum, adding to what is owed the U.S.

 

Pro forma, what would be owed the U.S. annually without the sweep is considerably more than $18.8 Billion, and the mountain of  arrears in addition to the $188 principal amount is growing at a rate of 10% per annum as we speak.

 

So that's what I was hoping to tease out with my question. Why would the dividends accumulate but for the sweep? Because but for the sweep, the companies were making tremendous profits (even aside from the mountain of non-cash DTAs that were recognized because of that profitability).

 

 

And the non-2013 profits above understate the companies' cash earning abilities because the DTAs would have kept cash taxes low, which means even more dividend paying capability for the GSEs. Alternatively, I suspect that, to the government, trading DTAs for dividends is probably just as good to them as cash, but that's a leap that doesn't need to be made because cash profitability would have been enough to continue to pay the $18B in dividends.

 

Am I missing something here?

 

I think there was a deal in progress because certain leading Democrats issued clarifications recently that they were no longer adamantly opposed to giving the public preferred holders anything in some sort of reorganization.  F&F used to be the Democrat's champion cash cow to fund their political campaigns. The former chairman of Fannie Mae led Obama's fundraising in his 2008 campaign.

 

Do you have a link to this? I'd be curious to see who that might have been.

 

It seems that the Jumpstart bill puts that in check.  But that's not checkmate.  However, with the Jumpstart bill, I don't see a clear way for a significant recovery for preferred shareholders until 2018 at the earliest if ever.

 

I appreciate thoughtful comments, not wishful thinking about possibly favorable court decisions. How might a favorable settlement happen in view of the Government's preferred shares being ahead of the other shares, assuming there's not a dramatic, favorable court ruling for other shareholders.

 

It looks to me that any settlement is going to have to come from the Administration because the Treasury holds the GSEs by the balls via the covenants in the SPSPA, and I'm not optimistic that this Administration would be willing to make any move unless forced to do so by some development in the legal courts. (Which is why I was asking for the reason you think a settlement might have been in the works.)

 

I think both Pelosi and Reid both issued statements several days ago back pedaling on their previous opposition to any deal that would give something to the public preferred holders or the common holders. When that happened it looked like there might be something nice in prospect for public preferred holders, and I considered getting back in for our fourth possibly multi bagger round trip.  However, the Jumpstart bill seems to throw a monkey wrench into the works.

 

With the loss from their balance sheet of the funds taken in the sweep, dividends would not prudently  be paid to the public preferred holders until that balance sheet is rebuilt.  Profits are now normalizing for F&F, and their latest year's earnings don't even provide enough to pay the annual dividends on the U.S. preferred,according to the chart.

 

Does anyone think the Administration is going to return the swept profits to F&F and restore their balance sheets?  In an election year? Would that help their election chances next fall?  If the answer is yes, well --- there's this bridge over an important river I would like to sell you.

 

I am not seeking confirmation of my latest view. I would be delighted to hear a credible way the administration can cut a deal now that is favorable to preferred holders.

 

Well theoretically there are 2 ways this can work out for shareholders.

 

1. The administration sees enough evidence or tries to save face and settle.

 

2. Gov is forced by court decision to work out settlement or return funds. This of course could be appealed but if any of the courts find the net sweep, delaware preferred law illegal etc funds have to be return regardless of the omnibus bill, what the administration thinks etc  correct?

 

It may not be this administration but eventually whoever is the president may not have a say in what $$$ is given back and how much.

 

 

Is there a good reason why jurisdiction in the U.S. Court of Claims would not trump all other venues?

[merkhet]

Is there a good reason why jurisdiction in the U.S. Court of Claims would not trump all other venues?

 

Yes. The U.S. Court of Federal Claims has limited jurisdiction to monetary claims brought under federal statute (and various other Government related laws and actions).

 

So the U.S. Court of Federal Claims, for instance, couldn't hear a case that deals with whether a U.S. Government agency overstepped its bounds by sidestepping Delaware corporate law, which is a matter of state law and is not purely a monetary damages issue.

[Guest cherzeca]

to expand upon merkhet's answer, the recoveyr for plaintiffs in the perry and hindes/jacobs cases has the potential to be much larger than in the fairholme ct claims case. 

 

while it is hard to predict what relief will be granted in any case upon a finding of liability, you will recall that starr won on liability but got stuffed on damages (currently on appeal, and boies brief is very good reading), because the damages analysis is what did plaintiffs' lose at the time of taking. this leaves govt able to claim credibly that GSEs were worth very little even summer 2012.  on the other hand, in the statutory authority cases (perry and hindes/jacobs), the likely relief upon a liability finding is for treasury to refund (or lower treasury's senior preferred preference) by the amount of "excess dividends", currently over $130B.

 

so if you think perry and hindes/jacobs will lose and fairholme will win, you want to be in junior pref, not common.  if you think perry and hindes/jacobs will win, while we can debate about margins of safety etc, the common begins to become very attractive.

 

so in addition to the scope of jurisdiction difference cited by merkhet's answer, there is also the scope of recovery possible that distinguishes the cases.

[twacowfca]

Is there a good reason why jurisdiction in the U.S. Court of Claims would not trump all other venues?

 

Yes. The U.S. Court of Federal Claims has limited jurisdiction to monetary claims brought under federal statute (and various other Government related laws and actions).

 

So the U.S. Court of Federal Claims, for instance, couldn't hear a case that deals with whether a U.S. Government agency overstepped its bounds by sidestepping Delaware corporate law, which is a matter of state law and is not purely a monetary damages issue.

 

That's a  good explanation.

 

It may be somewhat similar to the NextWave vs the FCC case that went all the way to the U.S. Supreme Court. NextWave won a ruling that U.S. bankruptcy court was the proper venue for valuing and disposing of the spectrum rights that NextWave bought in a FCC auction, not the FCC which tried to repossess those rights.

 

Will the minnow state of Delaware tweak the dragon's tail???

 

 

[Luke 532]

Will the minnow state of Delaware tweak the dragon's tail???

 

If the former Chief Justice of the Supreme Court of Delaware knows Delaware corporate law fairly well, then yes this mosquito bite might just result in a deadly case of West Nile virus for the government's defense.

[hardincap]

A question for all but esp. for cherzeca and merk: if you believe lamberth overreached in his decision to dismiss the perry lawsuit, how do you get comfortable with the risk that sweeney, sleet, and others could do the same? The Delaware case seems solid, esp. coming from a former chief justice, but the perry case seemed just as solid. Yet we saw in Lamberth's ruling what Epstein warned us about, that federal judges tend to give "enormous discretion to the government no matter how outrageous its conduct". If Lamberth will essentially evade the question of whether the NWS constitutes a securities transaction, for e.g., saying that that argument "reaches too far", how do you get comfortable that Sleet wont do the same in regards to Steele's argument that preferreds must bear preferential relationship to the dividends payable on the commons?

[merkhet]

A question for all but esp. for cherzeca and merk: if you believe lamberth overreached in his decision to dismiss the perry lawsuit, how do you get comfortable with the risk that sweeney, sleet, and others could do the same? The Delaware case seems solid, esp. coming from a former chief justice, but the perry case seemed just as solid. Yet we saw in Lamberth's ruling what Epstein warned us about, that federal judges tend to give "enormous discretion to the government no matter how outrageous its conduct". If Lamberth will essentially evade the question of whether the NWS constitutes a securities transaction, for e.g., saying that that argument "reaches too far", how do you get comfortable that Sleet wont do the same in regards to Steele's argument that preferreds must bear preferential relationship to the dividends payable on the commons?

 

Pepto Bismol. Large quantities. Costco helps.

 

At the end of the day, legal decisions are mostly rational but not entirely so. It was a low probability event, in my opinion, for Lamberth to rule as he did. It's similarly a low probability event that Sleet or Sweeney will rule similarly, but not a non-zero one.

[hardincap]

A question for all but esp. for cherzeca and merk: if you believe lamberth overreached in his decision to dismiss the perry lawsuit, how do you get comfortable with the risk that sweeney, sleet, and others could do the same? The Delaware case seems solid, esp. coming from a former chief justice, but the perry case seemed just as solid. Yet we saw in Lamberth's ruling what Epstein warned us about, that federal judges tend to give "enormous discretion to the government no matter how outrageous its conduct". If Lamberth will essentially evade the question of whether the NWS constitutes a securities transaction, for e.g., saying that that argument "reaches too far", how do you get comfortable that Sleet wont do the same in regards to Steele's argument that preferreds must bear preferential relationship to the dividends payable on the commons?

 

Pepto Bismol. Large quantities. Costco helps.

 

At the end of the day, legal decisions are mostly rational but not entirely so. It was a low probability event, in my opinion, for Lamberth to rule as he did. It's similarly a low probability event that Sleet or Sweeney will rule similarly, but not a non-zero one.

 

What would you identify as the major psychological biases at play in Lamberth giving the government so much discretion? Or do you think it was mostly incompetence? If it's the latter, we can take comfort knowing that its unlikely that all judges involved here are incompetent, but if its the former and all judges are under the influence of these subterranean factors that go against us, pass me the pepto bismol