Fannie Mae, Freddie Mac Ackman/Commons second suit. (Injunction) via TimHoward717.com
Ok, this could get very complicated if we are not careful. I am going to refer to the commons suits as Ackman/Commons because most media outlets are referring to them simply as “Ackman’s suits.” The new suit is an injunction request, so just as in the Fairholme case we will now have the “Ackman/Commons lawsuit”and the “Ackman/Commons injunction.” I am attaching PDF files below. I will be adding analysis so watch this post for edits. Keep the faith!
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Plaintiffs Louise Rafter, Josephine Rattien, Stephen Rattien, and Pershing Square Capital Management, L.P. (“Pershing Square”) (collectively, the “Plaintiffs”), by and through their undersigned attorneys, allege as follows:
- This is an action to redress an unlawful and enormous governmental expropriation in connection with the conservatorships of the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) (individually, a “Company”; collectively, the “Companies”).
- In 2012, the Federal Housing Finance Agency (“FHFA”), purportedly acting as the conservator of the Companies, and the Department of the Treasury (“Treasury”) (collectively, the “Government”) agreed between themselves to strip all profits from the Companies and to sweep those profits to Treasury every quarter, in perpetuity (the “Net Worth Sweep Agreements”).
- That Government confiscation of the entire net worth of the Companies is specifically intended not just to reap a windfall for the Government but to deprive the Companies’ common shareholders of any economic value in their shares. Through the confiscation, Treasury and FHFA simultaneously seek to “expedite the wind down of Fannie Mae and Freddie Mac.”
- The Government’s brazen conduct in establishing the self-dealing Net Worth Sweep Agreements and requiring the ongoing quarterly sweeps (the “Net Worth Sweeps”) is illegal. It violates the Administrative Procedure Act and the statute that Congress constructed to govern conservatorship of the Companies. It breaches FHFA’s and Treasury’s fiduciary duties to Plaintiffs, including by, in effect, converting Treasury’s special class of preferred shares of the