Monday, January 20, 2014

Fairholme Responds To Treasury Motion On Fannie Mae, Freddie Mac

Fairholme Responds To Treasury Motion On Fannie Mae, Freddie Mac

google it:
Fairholme Responds To Treasury Motion On Fannie Mae, Freddie Mac

fairholme and washington federal are ripping them apart. them is the govt.
get em boys.

Discovery is also almost certain to reveal information about whether FHFA 
voluntarily entered into the Net Worth Sweep or did so only at the direction of Treasury. It is 
highly likely that there exist strategy documents and communications between and among

he FHFA, as conservator for the Companies, has also
made or permitted statements, including in filings with the Securities and Exchange
Commission, concerning the future profitability of the Companies. The fact that the Government
has made these public pronouncements about the Companies’ finances strongly suggests that the
Government has information regarding their future profitability and how long they will remain in
conservatorship


It is a near-absolute certainty that Treasury, FHFA, and perhaps other
Government agencies have conducted financial analyses about the current and projected
financial condition and earnings of Fannie and Freddie, and about how long the conservatorships
will last and how they will end. Indeed, the fact that FHFA allowed the Companies to recognize
billions of dollars’ worth of the Companies’ deferred tax assets means that they necessarily
engaged in projections about the expected profitability of the companies and determined that the
Companies would be highly profitable


Whether the purpose of the Net Worth Sweep was to save the Companies or raid
their assets for the federal fisc, and whether FHFA voluntarily entered into the Net Worth
Sweep, are questions potentially relevant to the fact-bound inquiries of whether FHFA is “the
United States” for purposes of the Tucker Act or acted as a private party, as well as whether
Plaintiffs can state a taking under the fact-intensive Penn Central test and its inquiry into the
nature and character of the governmental action.
c. Whether the Companies were solvent in 2008 and whether investors could have
had reasonable investment-backed expectations in their future profitability are factual questions
relevant to the Penn Central inquiry into the reasonable investment-backed expectations of the
property owner.


According to the Government, whether the Companies will be profitable in the
future and remain in the conservatorship is a question of fact that bears upon the ripeness of
Plaintiffs’ claims. But the premise of the Government’s argument falls if there is evidence that
the Government expects the Companies to be very profitable for the foreseeable future


With regard to whether the Companies were insolvent in 2008 or whether
shareholders in the Companies would have had reasonable investment-backed expectations about
the Companies’ profitability and private control, Plaintiffs seek discovery of all nonprivileged
documents, and appropriate depositions, relating to the financial condition of Fannie and Freddie
at the time they were placed into conservatorship, and about the Government’s own expectations
about when and how Fannie and Freddie would return to normal business operations. The
discovery should also include the production of documents and depositions related to why the
Government allowed the Companies’ pre-existing capital structure and stockholders to remain in
place, and whether this decision was based in part on the expectation that the Companies would
be profitable again in the future


With regard to whether FHFA voluntarily entered into the Third Amendment,
Plaintiffs seek discovery of communications and documents of FHFA, Treasury, and other
Government agencies that concern the agencies’ analyses of the financial and other
considerations implicated by entering into the Net Worth Sweep. Discovery should include
production of all Government documents related to whether Treasury or other Government
agencies influenced the decision of FHFA to enter into the Third Amendment. Interrogatories,
depositions, and document productions are likely, in Plaintiffs’ view, to yield information that
would rebut the Government’s factual claims and reveal that Treasury or other Government
agencies played a causal role in FHFA’s decision to agree to the Net Worth Sweep


With regard to the purpose of the Net Worth Sweep, and whether it was enacted
to benefit taxpayers or the Companies, Plaintiffs seek discovery of evidence – including e-mails
and other communications and documents – regarding the decision to enter into the Third
Amendment. Plaintiffs should also be allowed depositions of officials involved in the decision
to enter into the Third Amendment. Plaintiffs also require the opportunity to serve
interrogatories, take depositions, and request the production of those documents relevant to the
genuine purpose of the Government in entering into the Third Amendment. This discovery
should include documents in the possession of Treasury, FHFA, and/or any other relevant
Government agencies


This discovery should include, for example, the production of all nonprivileged
documents, and appropriate depositions, relating to the Government’s belief that Fannie and
Freddie will remain profitable for the foreseeable future. Plaintiffs also need discovery about the
Government’s decision to allow the Companies to recognize billions of dollars of the
Companies’ deferred tax asset valuation allowances. This discovery should include documents
in the possession of Treasury, FHFA, and/or any other relevant Government agencies.


airholme has responded and wants to discover the governments facts they state. imagine how high the price of shares will go as discovery will let so many facts out, you cant hide behind false walls and fake talking out of both their faces. wow, let the truth out. make us all happy.

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