Frankly, if the government exercises warrants after they’ve been paid back (225 back from 187.5 borrowed), it sets a precedent that once any private company goes into conservatorship, even after they pay back what they’ve borrowed the government gets to keep 80% of the private business, thereby implying that any company that goes into conservatorship should immediately take an 80% write down.
The purpose of the warrants is, like in the case of AIG, if the business is not able to pay back what they’ve borrowed in a timely fashion and can be used to accelerate repayment via a quick recapitalization transaction. In any case where the borrower has already repaid principle and more, diluting the private stockholders is a violation of our fifth amendment constitutional rights and sets a very poor precedent for government action and increases instability during times of crisis and should incentivize all private companies to seriously question the “helping hand” of the federal government. Meanwhile, in this case in particular, it’s not like the government really followed the legal process for doing what they did, they just winged it and HERA absolved the company directors of any responsibility so why not, right?
Anyway, exercising the warrants is illegal. Bill Ackman’s pitch is for the doofus who doesn’t understand this but it’s a great PR stunt because his pro-forma surely makes a great case for ending the illegal third amendment net worth sweep designed by MR. ED DEMARCO who took the most profitable company in 2013 and gave it to his prior employer by engaging in lies and self dealing.
Good job ed. Notre Dame sure isn’t saying how great you are as a legacy alumnus. Fortunately, there’s another Notre Dame that’s stepping in, the one of Judge Sweeney of federal claims court, where government takings cases are adjudicated, and that notre dame has honor. What would be neat is if the notre dame where I grew up grew a pair and put out a press release talking about how they are disappointed in how a prior student engaged in the most deliberate and blatant fraud of my lifetime, I’m 28. Frankly, I don’t expect this from Notre Dame, and it is for these reasons that I never went, much less to say about Rudy or the people who I went to high school with that support the pathetic institution or my uncle, who is one of my favorite people, who got a degree from that joint, but I like that guy and will absolve him of the responsibility of holding his jerky university responsible.
Hail Notre Dame, just not the one that I grew up nearby, that one can continue to freeze in February temperatures, while I’m hanging out on Miami beach kicking waves around surrounded by strange models in bikinis that I’m more than happy don’t speak english because I don’t either, I just write the stuff.