Opinion ID: 2402228
Heading Depth: 1
Heading Rank: 1

Heading: A. The Parties

Text: Appellants were the named plaintiffs in what they characterized as a nationwide class action suit against Sallie Mae. [1] Congress established Sallie Mae as a private corporation which will be financed by private capital and which will serve as a secondary market and warehousing facility for student loans . . . and which will provide liquidity for student loan investments. 20 U.S.C. § 1087-2(a) (2000). By law, Sallie Mae must maintain its principal office in the District of Columbia and shall be deemed, for purposes of venue and jurisdiction in civil actions, to be a resident and citizen thereof. § 1087-2(b)(1). However, [o]ffices may be established by [Sallie Mae] in such other place or places as it may deem necessary or appropriate for the conduct of its business. Id. In 1996, Congress enacted the Student Loan Marketing Reorganization Act of 1996, authorizing a restructuring that was to include the transfer of all Sallie Mae common shares to a holding company. 20 U.S.C. § 1087-3(a) (2000). According to the terms of the reorganization: On the reorganization effective date, employees of [Sallie Mae] shall become employees of the Holding Company (or any subsidiary of the Holding Company), and the Holding Company (or any subsidiary of the Holding Company) shall provide all necessary and appropriate management and operational support (including loan servicing) to [Sallie Mae], as requested by [Sallie Mae]. [Sallie Mae], however, may obtain such management and operational support from persons or entities not associated with the Holding Company. § 1087-3(c)(3). The statute further provided that until its dissolution date, [Sallie Mae] shall continue to have all of the rights, privileges and obligations set forth in, and shall be subject to all of the limitations and restrictions of, section 1087-2 of this title, and [Sallie Mae] shall continue to carry out the purposes of such section. § 1087-3(c)(1). Accordingly, the statute contemplated an effective date of reorganization and a subsequent date for Sallie Mae's dissolution. But the statute did not specify either date. In fact, the statute required shareholder approval before the reorganization could commence. § 1087-3(b). Although the statute suggested methods by which the Board of Directors could effectuate the reorganization, it left the precise methods to the discretion of the Board of Directors, subject to approval by the shareholders. § 1087-3(a). [2]