The action entitled In re Fannie Mae/Freddie Mac Senior Preferred Stock Purchase Agreement Class Action Litigations, Misc. Action No. 13-mc-1288 (RCL) (the “Action”) is pending in the United States District Court for the District of Columbia. The plaintiffs in the Action are Joseph Cacciapalle (“Cacciapalle”), Michelle M. Miller (“Miller”), Timothy J. Cassell (“Cassell”), and Barry P. Borodkin (“Borodkin”) (collectively, “Plaintiffs”). The defendants in the Action are the Federal Housing Finance Agency (“FHFA”), the Federal National Mortgage Association (“Fannie Mae”), and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) (collectively, “Defendants”).
The Action concerns the conduct of Fannie Mae, Freddie Mac, and their conservator, the FHFA, in connection with the implementation of the Third Amendment (the “Third Amendment”) to the Senior Preferred Stock Purchase Agreements (the “PSPAs”) between Fannie Mae, Freddie Mac, and the United States Treasury (“Treasury”), dated August 17, 2012. Plaintiffs allege that Defendants, by agreeing to the Third Amendment, breached the implied covenant of good faith and fair dealing in the stock certificates of Fannie Mae and Freddie Mac preferred stock and Freddie Mac common stock by implementing a Third Amendment that required Fannie Mae and Freddie Mac to pay the Treasury a dividend equal to the full amount of their net worth every quarter, minus a reserve buffer. Plaintiffs allege the Third Amendment effectively made it impossible for private shareholders to ever receive any dividend or liquidation distribution from Fannie Mae and Freddie Mac, no matter how profitable the companies were, in breach of the implied covenant inherent in shareholders’ contractual relationships with Fannie Mae and Freddie Mac.
Defendants have denied all of Plaintiffs’ claims and assert that the Third Amendment was lawful. Defendants contend that the Third Amendment was reasonable under the terms of the shareholders’ contract with Fannie Mae and Freddie Mac. The Court has not decided whether Plaintiffs have proven their case or whether any Defendant has done anything wrong. The Court has allowed the Action to proceed as a class action and certified the above Classes. The persons to whom the Notice is addressed are “Class Members.” There is no money available now, and there is no guarantee that there ever will be. However, your legal rights are affected and you have a choice to make now. Your options are explained in the Notice.
UPDATE: Trial in this litigation was held between July 24, 2023 and August 14, 2023. The trial resulted in a jury verdict in favor of the Plaintiffs. The trial verdict and damages award will now move into post-trial briefing and appellate review. Further updates will be provided on this website as they become available.
YOUR LEGAL RIGHTS ARE AFFECTED WHETHER YOU ACT OR DO NOT ACT.
PLEASE READ THE COMPLETE NOTICE CAREFULLY.
| YOUR LEGAL RIGHTS AND OPTIONS IN THIS LAWSUIT
|
|
DO NOTHING
|
Stay in this Action. Await the outcome. Give up certain rights. By doing nothing, you preserve the possibility of obtaining money or benefits that may result from a trial or settlement of the Action. However, you give up the right to sue Defendants separately for the same or similar legal claims that have been asserted in this Action. If you choose to remain a Class Member, you do not need to do anything at this time other than retain your documentation reflecting your holdings in Fannie Mae junior preferred stock, Freddie Mac junior preferred stock, and Freddie Mac common stock.
|
|
ASK TO BE EXCLUDED
|
Get out of this Action. Get no benefits from it. Keep your rights. You may ask to be excluded from one or more of the Classes, in which case, if there is a trial or settlement in favor of Plaintiffs and the Classes, you will not receive any share of the benefit obtained for any Class from which you requested exclusion. In other words, if you ask to be excluded and money or benefits are later awarded to a Class of which you are currently a member, you will not share in those. On the other hand, if you ask to be excluded from one or more of the Classes, you preserve your right to sue Defendants separately for the same or similar legal claims that are asserted by those Classes in this Action. Please note, however, if you exclude yourself, Defendants will have the right to assert any and all defenses they may have to any claims that you may seek to assert, which may include an argument that you are time-barred from asserting the claims or similar legal claims covered by the Action by the statute of limitations. To exclude yourself, you must submit a written request for exclusion postmarked no later than April 23, 2022 (See Section IV in the Notice).
|
- These rights and options – and the deadlines to exercise them – are explained more fully in the Notice.
- The Court still has to decide whether to approve the Settlement. Payments will be made only if the Court approves the Settlement and that approval is upheld in the event of any appeal. Please be patient.