Monday, January 20, 2014

Berman Lawsuit: 2. The Government Bullied and Coerced the Companies’

radcliffff  Nov 26, 2013 9:53 AM Flag

From the Berman Lawsuit: 2. The Government Bullied and Coerced the Companies’ Boards of Directors Into Consenting to the Conservatorships,

Part 1

2. The Government Bullied and Coerced the Companies’ Boards of Directors Into Consenting to the Conservatorships, Thus Rendering Their Consent Invalid.

81. Title 12, section 4617(a)(3)(I) provides that the FHFA may be appointed conservator of a GSE when “[t]he regulated entity, by resolution of its board of directors or its shareholders or members, consents to the appointment.” Neither of the Companies fell within the purview of this subsection at the time they were placed in conservatorship.

82. The shareholders of Fannie Mae did not consent, by resolution or other means, to the appointment of a conservator. Likewise, the shareholders of Freddie Mac did not consent, by resolution or other means, to the appointment of a conservator. Instead, as explained above (¶¶ 68-73), the Companies were threatened and given a mere 24 hours to either accept the conservatorships or have them forced upon them. The de minimis period afforded to the Companies’ board members to consider the appointment of the FHFA as conservator was inadequate for meaningful deliberation, rendering any purported consent given by any of the Companies’ board members unsubstantiated and invalid.

83. In his September 7, 2008 public announcement of the appointment of a Conservator, Director Lockhart stated that “[t]he Boards of both companies [Fannie Mae and Freddie Mac] consented yesterday to the conservatorship.” However, Director Lockhart has since explained to the FCIC that the Government wanted to claim it had the Companies’ consent because, in his words “they were adequately capitalized” and, absent the so-called “consent,” there was no statutory basis for the conservatorship.


response:
Correct. If I hold a gun to your head and force you to sign a contract, that contract wont be enforcable by the courts. Its called duress. Otherwise, we could just kidnap Bill Gates and force him to sign over all his money. The court wont be put in the position of enforcing a contract based upon an illegal act.


No comments:

Post a Comment

leave a reply: