Fannie, Freddie Conservatorship Mirrors Chapter 11

Law360, New York (September 7, 2008, 12:00 AM EDT) -- The Bush administration's decision to place both Fannie Mae and Freddie Mac under "conservatorship" effectively amounts to the largest bankruptcies in U.S. history, even if the mortgage giants are not technically bankrupt.

On Sunday, Treasury Secretary Henry Paulson said the U.S. would take over both of the government sponsored entities, fire the companies' chief executives and inject up to $200 billion in capital.

The decision came after government advisors discovered that the firm's capital situation was weaker than previously estimated and could lead to a collapse...
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