Here is the problem as I see it: The Federal Government will almost certainly appeal an adverse court decision to the Supreme Court. Why? Because of the enormous amounts of money at stake. You have 4 judges who will basically give the Federal Government anything it wants (per the 4-4 immigration case deadlock).
Finally, you have another judge (Merrick Garland) who never, I repeat never, overrules a decision by a Federal regulatory agency unless it involves national security or terrorism.
Anyway, I sold all my shares and made a small profit. I think the outlook is bleak unless you uncover documents far more damaging than anything I have seen so far..
If there really were 800 documents released, I don't think we will know until Monday at the earliest if any of the documents are of great significance. I doubt very much if anybody on this board has looked at all 800 or even at more than 50, for that matter.
One other thing: I am curious to know is who came up with the idea for the "net profit sweeps." I suspect that the people at the AEI thought this up. Parrott(?) then sold this idea as his own, never mentioning to Congress or fellow government officials that this was part of a long standing plan to remove the private sector from the GSEs.
Has anybody found out what Jeremy Cain's background is? He apparently went to an enormous amount of effort to get this done.
I think the government's position is very, very precarious.
Let's say that the government wins at the Court of Appeals. When more info is released from those 12,000 hidden documents that supports our position, we will then be able to go back to the federal courts for a re-do.
I don't think there is any doubt that those documents contain info that is extremely damaging to the government's position. Otherwise, why would the government be making such strenuous efforts to block release of the documents???
I think the question is: How desperate is the Federal Government to keep these documents secret? Are they desperate enough to seek an out-of-court settlement?
If the FBI recommends indictment and the Attorney-General says no, for political reasons, my guess is that the director of the FBI will resign. You would have a political firestorm like you can not imagine. Same thing if President Obama pardons Hillary Clinton.
I think you could accomplish more by sending a letter to Donald Trump. Here, you have the potential for an enormous scandal, involving the possible theft of hundreds of billions of dollars from private citizens, which is made possible by the government concealing from public review more than 10,000 documents.
Please address your letter as follows:
Mr. Donald Trump, Chairman and President
The Trump Organization LLC
725 Fifth Avenue
New York, NY 10022
To be precise, the standard deviation of IQ scores for women is smaller than the standard deviation of IQ scores for men. The mean scores are about the same. In other words, fewer women are mentally #$%$ and fewer women are super geniuses as well.
It might be possible to do this liquidation in a way that Leonard T. might be more willing to accept. Let all the shareholders as of a certain date (say 7/1/16) be given a choice: They can bail out or they can remain with FSC. If they want to leave, then FSC will pay those people off. My guess is that 60 percent of the shares will be liquidated while 40 percent will chose to stay. This leaves Leonard T. with a business development company (FSC) with roughly $1 billion in assets; much smaller than before but still a going concern.
What all this is coming to is that there is really one way to make everybody happy and that is to LIQUIDATE Fifth Street Finance. This provides a number of advantages:
First, it provides all current shareholders with a gain of $3/share or about $450 million in all.
Second, it provides Leonard T. with an additional $100 million in net worth that he can use to help pay off claimants. It brings his liquid net worth from his FSC shares alone to nearly $300 million.
Third, I think it is clear that virtually none of the existing shareholders want him or trust him to remain as manager. This lets everybody go bye-bye and invest their money in whatever other investment they can find.
They can always buy FSFR if they prefer Leonard T. to do the work.
I repeat that the only solution to all these lawsuits that will provide the greatest recovery for everybody concerned is to liquidate the company as close to current net asset value as possible.
Here is the problem with your analysis: You simply have no idea how much Leonard T. has borrowed to pay for all those shares of FSC and FSFR he owns.I happen to agree that $200M sounds like a good estimate.
Also, if FSAM goes down the tubes because of all the structural changes you want to see at FSC, then he is going to face more lawsuits than you can count with respect to FSAM.
This is very encouraging. I am surprised though that you did not take this "devastating" information directly to the U.S. Securities And Exchange Commission or to the U.S. Department of Justice. Criminal prosection of FSAM becomes a very real possibility at that point.