Fairholme Capital Management LLC, the investment management firm headed by Bruce Berkowitz, vowed to pursue the rights of private shareholders to profits from Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC).
The investment management firm issued a statement reaffirming its commitment to pursue its claims after losing a legal battle against the United States government in connection with the bailout for the two mortgage giants.
“Litigation is a lengthy process. On behalf of hundreds of thousands of Fairholme Funds shareholders, we will vigorously pursue the enforcement of existing contractual claims and our inalienable rights of property ownership as guaranteed by the United States Constitution,” according to the statement of Fairholme through Sard Verbinnen & Co.
Investment strategies used by hedge funds have evolved over the years, although the biggest changes have come in the use of computers to develop portfolios. Rosetta Analytics is a woman-founded and woman-led CTA that's pioneering the use of artificial intelligence and deep reinforcement learning to build and manage alternative investment strategies for institutional and private Read More
Berkowitz believed there is a “winning solution” for Fannie Mae
In an interview with Consuelo Mack on WealthTrack, Berkowitz said the government and private shareholders would ultimately reach “win-win” agreement regarding the case involving their rights to profits from Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC).
Berkowiz said, “There’s a winning solution for every constituency in Fannie Mae and Freddie Mac.”
Fairholme,other investors lost suits on Fannie Mae, Freddie Mac profits
Yesterday, Fairholme and other investors lost two cases related to their claims on the profits from the mortgage giants.
The investors filed a lawsuit against the government for breach of contract regarding the alleged promised dividends and liquidation preferences. Fairholme and his fellow investors argued the government made an “illegal taking” under the U.S. Constitution.
U.S. District Judge Royce Lamberth of the District of Columbia dismissed the claims of the investors. She pointed out that the government has the authority to sweep “nearly all” profits from Fannie Mae and Freddie Mac to the U.S. Treasury under Housing and Economic Recovery Act.
Lamberth said, “It is understandable [for the profit sweep] to raise eyebrows, or even engender a feeling of discomfort.” The judge added that the act and the language of the companies’ stock certificates compel “the dismissal of all of the plaintiffs’ claims.”