Federal Home Loan Mortgage Corporation (QB)【FMCCM】株式ニュース

Good Substack Post Regarding the Fairholme Decision and Timing from ROLG :

Waiting on the Fairholme Decision in the DC Circuit, and Why GSE Recap/Release Should Proceed Once the Decision is Reached
The GSE shareholders will win in Fairholme, which will answer any question Treasury may have about whether it must cancel its GSE senior preferred stock as fully repaid in any GSE recap/release.
RULE OF LAW GUY

JUN 19

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The GSE class action plaintiffs in Fairholme Funds, Inc v. FHFA
• outclassed FHFA in the oral argument before Judges Ginsberg, Walker and Childs, as I discussed in Oral Argument in the GSE Net Worth Sweep Damages Case Before the DC Circuit Court of Appeals and Oral Argument in the GSE Net Worth Sweep Damages Case Before the DC Circuit Court of Appeals, Part II. Who Wins?, and
• benefitted from the Delaware Supreme Court’s favorable decision, rendered post-Fairholme oral argument, in a case that answers in the affirmative the question that was still open at the time of oral argument, whether under Delaware law shareholder claims arising from the Obama administration’s infamous net worth sweep (NWS) travel with the shares, which
• serves to defeat FHFA’s strongest argument it had at oral argument (that GSE common shareholders acquiring shares post-NWS had no standing) in its effort to reverse the jury decision at trial.
For those who wish to characterize the DC Circuit judges’ on a liberal/conservative scorecard, Walker leans conservative while Childs leans liberal. As for Ginsburg, one may recall that he was the appellate judge who led the reversal of Judge Lamberth’s initial ruling in the Fairholme case that there was no good faith/fair dealing duty owed by the GSEs to shareholders.
So while Ginsburg can be hard to pin down on a liberal/conservative metric (which is a feature, not a bug, for a judge), he is a strong voice in favor of application of the good faith/fair dealing duty to the facts presented by the NWS. The most salient aspect of oral argument was when class plaintiffs counsel carefully walked through the various bad faith acts by FHFA/Treasury in connection with the NWS in the record below, in reply to a question by Judge Ginsburg.
I expect Ginsburg will find that the NWS breached the good faith/fair dealing duty and write the opinion; Childs will agree with Judge Ginsburg; and Childs, who might be disposed to find in favor of the NWS as an act by a Democrat POTUS, doesn’t have the intellectual chops nor the facts in the record to stand up to Ginsburg (or convince Childs to join her if she tries).
The oral argument was held April 21, 2026, and so one might expect a decision in another month or two. I don’t expect SCOTUS will take up any cert. petition by FHFA.
So, I believe the DC Circuit Court of Appeals will affirm the jury decision that the GSEs (read FHFA and Treasury) breached its duty of fair dealing and good faith under Delaware law when they implemented the NWS and
• Treasury siphoned off the GSEs’ net worth in an aggregate amount more than sufficient to retire Treasury’s senior preferred stock (SPS), but
• characterized these distributions as dividends so as to leave the SPS outstanding in full.
Now, here is the question that I suggest Treasury Secretary Bessent has been focused on that has delayed progress on GSE recap/release:
• whether Treasury has freedom to convert the SPS into common stock in any GSE recap/release; and
• here is the intellectual waterfall that will follow from the Fairholme appellate decision that will answer this question for Treasury Secretary Bessent:
• since the NWS amendment breached the GSEs’ good faith/fair dealing duty to common shareholders, NWS distributions were improperly characterized as dividends;
• since the NWS distributions were not legally valid dividends, then these distributions must be re-characterized as distributions which were more than sufficient to retire Treasury’s SPS; and
• any attempt by Treasury to derive value from the SPS, such as by converting the SPS into common stock, is invalid as simply an attempt to profit from an act, the NWS, that has been already been judicially invalidated as a breach of the good faith/fair dealing duty; and
• any act by Treasury, other than to cancel the SPS as more than fully repaid, will itself constitute another good faith/fair dealing duty breach, which if done would
• generate new GSE shareholder litigation that will frustrate Trump 47’s attempt to consummate a GSE recap/release in what remains of his term.
Do I think Scott Bessent, as a past adjunct professor of financial history, disfavors the NWS, as a misbegotten aberration in the annals of US corporate financial practice?
Yes.
Do I think Scott Bessent, as Treasury Secretary, needed an answer to the question, whether Treasury could validly proceed with a conversion of its GSE SPS into common stock, before proceeding with any GSE recap/release?
Yes.
Within another month or two, Treasury Secretary Bessent will have his answer.