The Fairholme Fund – a mutual fund with more than 170,000 shareholders that is managed by Miami-based Fairholme Capital Management, said Tuesday 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,” Bruce R. Berkowitz, managing member and chief investment officer of Fairholme Capital Management, said in a statement. “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.”