Fannie Mae: Fairholme Files Sealed Response to Gov’t Motion by Todd Sullivan, ValuePlays

Here it is….

Fannie Mae Fairholme

Now the questions have to be asked, why? The most logical reason is that much of the response contains information obtained during discovery and is then covered under the protective order due to the potentially explosive nature of it.

Fannie Mae – Peter Chapman opines:

Fairholme’s filing of the Response under seal means that the document makes multiple references to documents that have been designated as confidential in the discovery process — documents that, presumably, if made public would rock financial markets.  The exhibits, presumably, are not being made public because they are confidential materials as defined in Judge Sweeney’s Protective Order.

The filing of any document in a Federal court entirely under seal is extraordinary out of the ordinary.  We can’t even see the caption?  We can’t see the words the, a, and, Fairholme, United States, and any other nouns, verbs and adjectives because those words would cause the financial markets to crater?  That’s very unlikely.  Documents filed in Federal Court’s carry a presumption in the U.S.A. of being open to the public.

Fairholme may file a redacted version of its response in the next day or so to black out only those portions that refer to secret documents.  This would be normal.  We’ll see.

But it doesn’t end there:

Another sideshow is likely to erupt if Fairholme doesn’t file a partially redacted copy of their Response to the Government’s motion for a stay.  Bloomberg, The New York Times, Dow Jones, The Washington Post, or another large news agency is likely to file a motion to break or chip away at the seal.

Fannie Mae: An effort to enable public dissemination of the documents

This is where things start to get interesting when the media begins then siding with plaintiffs in an effort to enable public dissemination of the documents. I can imagine FOIA requests are being drawn up by media outlets as I type. One can then easily see the conversation turning to “what is the gov’t hiding” as nothing piques the media’s interest like being told they can’t see what is happening.  This will be good for plaintiffs as up until this point the whole affair has been treated with a fair degree of ambivalence.

I would be very surprised if Fairholme did not file a redacted version in the near future. It does stand to reason that before they publicly filed something, they’d want the Judges approval on it rather than risk violating the protective order and materially injuring their case. It is very possible one of the seven exhibits attached to the filing is in fact a proposed redacted version.

Should that be filed things really get going as we get to then play “fill in the blanks” between what we can see and what is redacted.

Like I have been saying since this summer, this is a LONG way from over…….