Fairholme Wins Discovery Against Treasury In Fannie, Freddie Suit

Feb 27 2014 | 11:38am ET

Fairholme Capital Management can collect evidence from the U.S. Treasury Department about the bailout of Fannie Mae and Freddie Mac.

Fairholme’s mutual fund arm sued the Treasury last summer after it moved to seize all of the profits of the mortgage giants, echoing a similar complaint from Perry Capital. Yesterday, U.S. Federal Claims Court Judge Margaret Sweeney gave permission for Fairholme to conduct discovery.

At issue is whether the future profitability of Fannie and Freddie—which the government has pledged to shut down—can be determined. The U.S. says it cannot, because both companies are currently under federal conservatorship.

But Sweeney wrote that “discovery will enable plaintiffs to confirm that such evidence exists with regard to profitability and additionally answer the question as to when, and how, the conservatorship will end.”

Sweeney said that after Fairholme had gathered its evidence, she would consider the government’s bid to have the lawsuit dismissed.

In Depth

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


U.S. Trust's Beard: The Rapid Growth of the Art Lending Industry

Oct 7 2016 | 10:55pm ET

Alternative investment managers have emerged as some of the most significant art...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...