The Fairholme Fund Petitions Courts to Protect Property Rights of Fannie Mae and Freddie Mac Preferred Shareholders
MIAMI--(BUSINESS WIRE)-- The Fairholme Fund (Nasdaq: FAIRX ) – a long-term, value-oriented mutual fund with over 170,000 shareholders – announced that it is filing suits this week in both the United States Court of Federal Claims and the United States District Court for the District of Columbia to protect its rights as an owner of preferred stock in Fannie Mae and Freddie Mac, including the right to receive dividends from the profitable companies.
“Fannie Mae and Freddie Mac are rapidly repaying the Government,” said Bruce R. Berkowitz, Managing Member and Chief Investment Officer of Fairholme Capital Management. “Their success should surprise no one given the value of Fannie and Freddie. Once the Government has recouped its investment, The Fairholme Fund – on behalf of our shareholders who are predominantly individual Americans with an average investment in the Fund of $43,000 – is owed a contractually specified, non-cumulative dividend for its investment in these companies. As solvent, highly profitable companies, Fannie and Freddie should honor all outstanding obligations to their investors.”
Fairholme’s actions do not challenge the 2008 emergency investments by the Government in Fannie and Freddie. Instead, Fairholme is contesting the August 2012 “Net Worth Sweep” that attempted to change the rules of priority. “Fairholme’s objective is quite simple,” continued Berkowitz. “The Government set the terms of their 2008 investments and should be held to their original deal.”
The Fairholme Fund is represented in this matter by Cooper & Kirk, PLLC, and remains independent from other pending litigation involving Fannie Mae and Freddie Mac.
Effective February 28, 2013, The Fairholme Fund suspended the sale of shares to new investors, including new investors seeking to purchase Fund shares directly from the Fund or indirectly through financial intermediaries. Shares of the Fund remain available for purchase to existing Fund shareholders. The Fund retains the right to make exceptions to the suspension of the sale of its shares to new investors.
Investing in the Fund involves risks including loss of principal. The Fund’s investment objectives, risks, charges, and expenses should be considered carefully before investing. The Fund’s summary prospectus and prospectus contain this and other important information about the Fund, and they may be obtained by calling Shareholder Services at 1-866-202-2263 or visiting our website www.fairholmefunds.com . Read them carefully before investing.
For a copy of the top holdings for The Fairholme Fund, please click here . Portfolio holdings are subject to risk and may change at any time.
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