RELEASED: Monday, March 14th, 2016
Telephone: (800) 475-6701
International: (320) 365-3844
Access Code: 389114
WASHINGTON, D.C.—On Tuesday, March 15 at 2:00 pm EST, Investors Unite Executive Director Tim Pagliara will host a teleconference to update Investors Unite members and the media on suits he has filed in Delaware and Virginia to inspect corporate records of Fannie Mae and Freddie Mac related to the Net Worth Sweep.
Fannie Mae and Freddie Mac were placed under conservatorship at the height of the financial crisis in late 2008. When the companies returned to profitability in 2012, the terms of their agreements with the U.S. Department of Treasury were amended to force them to turn over every all their profits to the Treasury every quarter. This so-called Net Worth Sweep has prompted several shareholder lawsuits. Pagliara’s complaints filed today are the first to focus on a shareholder’s right to inspect corporate records pursuant to the state corporate laws under which each company operates.
Pagliara is the founder of CapWealth Advisors. He is also the executive director of Investors Unite, a coalition of individual investors committed to preserving shareholder rights for those invested in Freddie Mac and Fannie Mae. Pagliara is not acting on behalf of Investors Unite in this litigation.
Joining Pagliara for the teleconference will be Barr Flinn, who is representing him in Delaware in the complaint against Fannie Mae, and Tom Connally, who is representing him in Virginia in the complaint against Freddie Mac.
To view the filings, visit the Investors Unite website.
To join the teleconference, please RSVP to email@example.com.
Tim Pagliara, Investors Unite Executive Director, CapWealth Advisors Chairman and CEO
Barr Flinn, Partner, Young Conway Stargatt & Taylor LLP
Tom Connally, Partner, Hogan Lovells US LLP
WHAT: IU Teleconference on Pagliara Lawsuit against Fannie, Freddie
WHEN: March 15, 2016 at 2:00pm EST
DIAL IN: Toll Free: (800) 230-1093
RSVP: Please RSVP to firstname.lastname@example.org
About Investors Unite: Formed by Tennessee investor and CapWealth Advisors Chairman and CEO, Tim Pagliara, Investors Unite (investorsunite.org) is a coalition of over 1,500 private investors from all walks of life, committed to the preservation of shareholder rights for all invested in Fannie Mae and Freddie Mac. The coalition works to educate shareholders and lawmakers on the importance of adopting GSE reform that fully respects the legal rights of Fannie Mae and Freddie Mac shareholders and offers full restitution on investments.
Privilege Logs Offer a Glimpse into Library of Secrecy
RELEASED: March 14, 2016
In the interest of transparency in governmental decision making, we are posting some documents related to the litigation concerning the Third Amendment Sweep.
Investors Unite is the largest organization of Fannie Mae and Freddie Mac shareholders. As such, we were able to obtain the logs of documents related to the Sweep for which the U.S. Treasury Department and the Federal Housing Financial Agency seek privilege – that is, concealed from public view.
As we have noted, the government’s effort to conceal documents and communications related to the 2012 decision to sweep the revenues of Fannie and Freddie into the general revenue stream has emerged as an issue of concern independent of the Sweep itself. Fairholme Funds has been stonewalled in the effort to demonstrate the government’s misapplication of the Housing and Economic Recovery Act. John Yoo, a distinguished law professor and top official in the Administration of President George W. Bush, believes the use of executive privilege in this case is unwarranted and overbroad. Writing in the San Francisco Chronicle on March 13, he warned of an “unprecedented and disturbing obsession with secrecy.”
Reporters and commentators on the controversial policies undertaken during the conservatorship of the GSEs have mentioned the enormous volume of documents the government has tried to shroud under executive privilege in this case. The inordinate level of secrecy has also raised concerns by Senate Judiciary Committee Chairman Charles Grassley. The New York Times has also gone to court to gain access to some documents.
Currently, Federal Claims Courts Judge Margaret Sweeney is reviewing Fairholme’s motion to unseal many documents. At the very least, we hope Judge Sweeney’s ruling will result in additional restrictions and more clarity on which documents, if any, justify protection by executive privilege and why.
Regardless of that ruling, which is expected in the very near future, we believe the privilege logs submitted by Treasury and FHFA prompt concerns and skepticism about the very broad assertion of executive privilege. Just the list of documents, emails and other correspondence for which the government seeks privilege runs for roughly 1,200 pages. The documents themselves run to roughly 180,000 pages. In addition, even a casual perusal of these logs reveals what seem to be a lot of very routine communications that occur within the government every day, and not simply a handful of high-level memos on policy options under review.
We have long argued the Sweep cannot be justified legally or as a policy matter. We hope these privilege logs will invite new scrutiny. The government should welcome the chance to detail why its internal deliberations made sense and yielded the policy it did.
Other Court Schedules. They are Subject to Change without Notice.
Order Regarding Administrative Records on February 10, 2016
Treasury and FHFA to file an Administrative Record have been delayed.
Treasury and FHFA will file renewed motions to dismiss by Mar. 18, 2016
Saxton Plaintiffs will file their objection by Apr. 18, 2016
Treasury ad FHFA will file their Replies by May 18, 2016
Revised Perry Appeals Court briefing schedule:
Appellees’ Brief Filed on December 21, 2015
Appellants’ Reply Brief (Class Plaintiff) filed on February 2, 2016
Appellants’ Reply Brief (Institutional Plaintiff) filed under Sealed on February 2, 2016
Deferred Appendix on or before February 16, 2016
Joint Appendix Volume II of V (This file is 12 MB)
Joint Appendix Volume III of V (This file is 24 MB)
Final Briefs on or before March 8, 2016
- Class Plaintiffs Final Brief 14-5243-1602880 14-5243-1602879
- Institutional Plaintiffs Final Brief 14-5243-1602876 14-5243-1602874
- FHFA’s Final Brief 14-5243-1602703
- Treasury Final Brief 14-5243-1602442
Oral Argument on April 15, 2016
Jacobs and Hindes Delaware Case Schedule:
Plaintiffs’ briefs completed January 15, 2016
Filing from January 15, 2016
Myron Steele on behalf of Jacobs and Hindes case, click here to view.
Myron Steele request to certify Questions for Supreme Court Ruling, click here to view.
- Does Delaware law permit preferred stock of a corporation to have a cumulative dividend right equal to the entire net worth of the corporation, payable quarterly in perpetuity, as provided in Section 2 of Fannie Mae’s Amended and Restated Certificate of Designation of Terms of Variable Liquidation Preference Senior Preferred Stock, Series 2008-2, dated September 27, 2012 (which is attached hereto as Exhibit A)?
- Does Virginia law permit preferred stock of a corporation to have a cumulative dividend right equal to the entire net worth of the corporation, payable quarterly in perpetuity, as provided in Section 2 of Freddie Mac’s Amended and Restated Certificate of Creation, Designation, Powers, Preferences, Rights, Privileges, Qualifications, Limitations, Restrictions, Terms and Conditions of Variable Liquidation Preference Senior Preferred Stock (Par Value $1.00 Per Share), dated September 27, 2012 (which is attached hereto as Exhibit B)?
Tim Howard, Fannie Mae’s former CFO, wants to file an Amicus Brief
FHFA’s reply briefs in support of their Motion to Dismiss due on or before February 16, 2016.
Treasury’s reply briefs in support of their Motion to Dismiss due on or before February 16, 2016.
Defendants’ response to the Application for Certification due on or before February 16, 2016.
Plaintiff’s reply in support of the Application for Certification due on or before February 26, 2016
Revised Fairholme Funds Sweeney Case Schedule:
Plaintiffs’ filed a Motion to Compel on November 23, 2015.
Plaintiffs’ Jurisdictional Discovery Extended. Estimated End Date March 31, 2016.
Depositions completed on January 14 and 20, 2016. Subject to Extension.
Defendant’s Redacted response to plaintiffs’ Motion to Compel completed under sealed on January 21, 2016.
A joint status report completed on January 28, 2016.
Plaintiffs’ Redacted reply to Defendant’s Motion to Compel response completed under sealed on February 1, 2016.
*****Fairholme Sweeney Case Schedule Update*****
Schedule for consolidated briefing of motions to dismiss the complaints in this case and the related actions.
- Plaintiffs in this and the related cases may file amended complaint(s) no later than 45 days after the Court’s resolution of plaintiffs’ pending Motion to Compel (ECF No. 270) unless the Court should permit further discovery by the plaintiffs.
- Defendant will file an Omnibus Motion to Dismiss seeking dismissal of this and all related actions before this Court no later than 120 days after the expiration of the period for filing the amended complaint(s);
- Plaintiffs in this case will file their response to Defendant’s Omnibus Motion to Dismiss no later than 90 days following the filing of the Omnibus Motion to Dismiss, and plaintiffs in each of the related cases will be permitted to file their own separate response to Defendant’s motion also within 90 days following the filing of the Omnibus Motion to Dismiss;
- Defendant will file a reply in support of its Omnibus Motion to Dismiss no later than 90 days following the filing of response(s) to the Omnibus Motion to Dismiss in this and related cases.
Assuming discovery draws to a close on Mar. 31, 2016, the “estimated timetable” would be:
- Plaintiff Amended Complaints around May 15, 2016;
- Defendant Omnibus Motion to Dismiss around Sept. 12, 2016;
- Plaintiff Responses to the Omnibus Motion to Dismiss around Dec. 11, 2016;
- Defendant Reply in support of Omnibus Motion to Dismiss around Mar. 11, 2017;
- Judge Sweeney’s decision on Omnibus Motion to Dismiss some time thereafter.