           Case: 14-14115   Date Filed: 07/22/2015   Page: 1 of 41


                                                                     [PUBLISH]



             IN THE UNITED STATES COURT OF APPEALS

                     FOR THE ELEVENTH CIRCUIT
                       ________________________

                             No. 14-14115
                       ________________________

                 D.C. Docket No. 6:04-cv-00698-JA-DAB

COX ENTERPRISES, INC., a Delaware corporation,

                                                          Plaintiff - Appellant,

                                  versus

NEWS-JOURNAL CORPORATION, a Florida corporation,
HERBERT M. DAVIDSON, JR.,
MARC L. DAVIDSON,
JULIA DAVIDSON TRUILO,
JONATHAN KANEY, JR., SERVICE, et al.

                                                       Defendants – Appellees,

PENSION BENEFIT GUARANTY CORPORATION,

                                                          Claimant – Appellee.

                       ________________________

                Appeal from the United States District Court
                    for the Middle District of Florida
                      ________________________

                              (July 22, 2015)
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Before ED CARNES, Chief Judge, JILL PRYOR and HIGGINBOTHAM, ∗ Circuit
Judges.

HIGGINBOTHAM, Circuit Judge:

         This litigation has a long history in the Eleventh Circuit. In this latest

chapter Cox Enterprises and Pension Benefit Guaranty Corporation (PBGC) do

battle for what remains of the now-defunct newspaper publisher News-Journal

Corporation (NJC). This case arises at the intersection of Florida’s election-to-

purchase statute1 and its distributions-to-shareholders statute.2 The election-to-

purchase statute affords a corporation faced with a derivative suit the option to

purchase the shares of the complaining shareholder in order to cause dismissal of

the suit. The distributions-to-shareholders statute generally forbids a corporation

from reacquiring shares by distribution if such distribution would render the

corporation insolvent. Cox brought a derivative suit against NJC. NJC, in turn,

elected to purchase Cox’s shares. But at no time could NJC reacquire Cox’s shares

without rendering itself insolvent. As a consequence, NJC never made a

distribution to Cox and Cox never relinquished its shares. Although at all times a




     ∗
     Honorable Patrick E. Higginbotham, United States Circuit Judge for the Fifth
Circuit, sitting by designation.
1
    Florida Statutes § 607.1436.
2
    Florida Statutes § 607.06401.
                                             2
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shareholder, Cox attempts to prosecute its claim as a creditor of the now-defunct

company.

         A prior panel of this court instructed the district court to determine whether

distribution of NJC corporate assets to Cox, a shareholder, would render NJC

insolvent and, if so, to direct NJC to pay PBGC, a creditor, before distributing any

assets to Cox. On remand, the district court heeded this court’s instruction. We are

now asked to reconsider the prior panel’s holding and the district court’s

application of it.

                                             I.

         We relate facts aptly stated in this court’s 2007 3 and 2012 4 decisions,

supplementing as necessary. Eugene C. Pulliam organized NJC in 1925 when he

acquired and consolidated two small Daytona Beach newspapers into a single

newspaper, the Daytona Beach News-Journal. Pulliam paid cash for one of the

acquired newspapers and granted a 40% interest in NJC for the other, owned by T.

E. Fitzgerald. NJC had one class of common stock with 4,000 shares issued and

outstanding. In 1927, Pulliam sold his 60% interest to Julius and Herbert Davidson,

giving the Davidson family a majority of NJC’s shares. Over the ensuing decades,

Fitzgerald’s minority 40% interest changed hands until, in 1963, the minority

3
    Cox Enters., Inc. v. News-Journal Corp. (“Cox I”), 510 F.3d 1350 (11th Cir. 2007).
4
 Cox Enters., Inc. v. Pension Ben. Guar. Corp. (“Cox II”), 666 F.3d 697 (11th Cir.
2012).
                                             3
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interest holder, John H. Perry, Jr., purchased an additional 7.5% interest in NJC

from a member of the Davidson family, leaving him with 47.5% of NJC’s

outstanding shares. In 1969, Perry sold his minority interest to Cox, a privately

held media conglomerate. Cox has maintained the 47.5% interest comprising 1,900

shares in NJC. The remaining 2,100 shares, which comprise a controlling 52.5%

interest in NJC, are now owned by a closely held corporation controlled by the

Davidson family.

      Cox I set out the more recent history of NJC’s corporate activities:

      [When this case began,] NJC's directors were Tippen Davidson, Marc
      Davidson, Julia Davidson Truilo, Robert Truilo, Georgia Kaney,
      Jonathan Kaney, Jr., and David Kendall. Tippen Davidson also served
      as the president and CEO of NJC until his death in January 2007.
      Tippen Davidson's grandfather, Julius, served as the News–Journal's
      publisher from 1927 until 1962, when he relinquished control of the
      paper to his son Herbert M. Davidson. Herbert published the paper
      until his death in 1985. Under Julius and Herbert's leadership, NJC
      also owned and operated a radio station, WNDB–FM, from 1944 to
      1972.

      Although Tippen Davidson enjoyed a brief career as a professional
      musician, he eventually returned to Daytona Beach to work as a
      reporter and city editor for the News–Journal. Upon his father's death,
      he became the paper's general manager and publisher. Tippen's wife,
      Josephine, has also worked as a reporter and editor at the News–
      Journal. Their two children, Marc Davidson and Julia Davidson
      Truilo, are currently members of the News–Journal staff and the NJC
      board of directors. Julia's husband, Robert Truilo, serves on the board
      of directors and as the News–Journal's business manager.

      In his capacity as CEO of NJC, Tippen Davidson continued to pursue
      his interest in music and the performing arts. As early as 1966, he
      began to help create several non-profit organizations, including the
                                         4
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         Florida International Festival (“FIF”), Central Florida Cultural
         Endeavors (“CFCE”), Seaside Music Theater (“SMT”), and Lively
         Arts Center, Inc. (“LACI”) (collectively “Cultural Entities”). SMT, in
         particular, has consistently depended on funding from NJC. After NJC
         pledged $1.8 million to SMT in 1993, NJC management developed a
         “spin-off strategy” according to which contributions to SMT would go
         down by $180,000 annually until they totaled no more than $500,000
         per year. The strategy was never effectively implemented, and, in fact,
         in 1999, NJC's total contribution to SMT came to $1.4 million. By the
         following year, this figure had risen to $1.8 million—triple what it
         had been eight years before.

         In 1996, NJC's directors organized LACI as a part of the SMT spin-
         off strategy. Tippen, Georgia Kaney, Marc Davidson, and Julia Truilo
         served as its original board of directors. Their goal was to build and
         operate an independent and upscale performing arts center for SMT,
         thereby enhancing the stature of SMT and increasing its revenue. The
         projected cost for the center was $29 million. NJC provided $13
         million of this amount as part of a naming rights agreement. 5

         In the beginning, NJC treated its contributions to the Cultural Entities
         as charitable tax deductions. Over time, however, the donations began
         to exceed the maximum allowed for charitable deductions.
         Accordingly, in 1993, NJC began to classify its contributions as
         business expenses for the purpose of corporate promotion. The district
         court found these cultural expenditures to have been waste . . .

         Cox first learned of the $13 million naming rights agreement on 10
         March 2004. Unsatisfied with the explanations for this expenditure

5
    Per Cox I:

         In addition to financial support, the Cultural Entities [were]
         intertwined with NJC by common management . . . [O]ver the five-
         year period leading up to the filing of this action, seventeen CFCE
         employees, thirty-eight SMT employees, and three LACI employees
         were on the NJC payroll. Many of the Cultural Entities employees
         also worked in the News–Journal building and received the same
         benefits as News–Journal employees. Cox I, 510 F.3d at 1353 n.2.

                                             5
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         provided by NJC, Cox filed suit on 11 May 2004, alleging various
         acts of fraud, waste, and mismanagement. 6

In response to Cox’s suit, NJC elected to purchase all shares owned by Cox at fair

value pursuant to Florida’s election-to-purchase statute, which allows a corporation

or one or more of its shareholders to purchase the shares of a petitioning

shareholder at fair value in order to cause dismissal of the suit.7

         Because the parties could not agree on the fair value of Cox’s shares, the

statute required the district court to determine their fair value “as of the day before

the date on which [Cox’s suit] was filed.”8 Along with the News-Journal

newspaper, NJC had one wholly-owned subsidiary, Volusia Pennysaver, Inc. The

district court held an eight-day bench trial during which both sides presented

expert testimony regarding value and valuation methodology as to both entities.

The district court accepted the valuation for Pennysaver proffered by Cox’s




6
    Id. at 1352-54.
7
    Section 607.1436(1) provides:

         In a proceeding under [section] 607.1430(2) or (3) to dissolve a
         corporation, the corporation may elect or, if it fails to elect, one or more
         shareholders may elect to purchase all shares owned by the petitioning
         shareholder at the fair value of the shares. An election pursuant to this
         section shall be irrevocable unless the court determines that it is equitable
         to set aside or modify the election.
8
    Fla. Stat. § 607.1436(4).

                                              6
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valuation expert and valued Pennysaver at $36 million.9 The district court also

adopted the cash-flow analysis for the News-Journal proffered by Cox’s valuation

expert with minor modifications, premised on several conclusions: first, that NJC

was a marketable corporation—that its shares would command an attractive price

on the open market; second, that the News-Journal had experienced “abnormally

poor performance relative to comparably situated newspapers” as a result of

mismanagement; and third, that proper valuation of NJC as a going concern

required normalization of “the financial data of a poorly operated corporation

before determining what the corporation would sell for in an arm’s-length

transaction.”10 To this third point, related to normalization, although the News-

Journal at that time had an actual EBITDA margin 11 of 9.3%, the district court

applied a normalized EBITDA margin of 24.8% according to the EBITDA margins

of similarly situated newspaper corporations not subject to mismanagement.12

Based on the News-Journal’s 2004 gross revenue of approximately $66 million,

9
 See Cox Enters., Inc. v. News-Journal Corp., 469 F. Supp. 2d 1094, 1103, 1108 (M.D.
Fla. 2006).
10
     See id. at 1107-08.
11
  EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.”
The EBITDA margin is calculated as the ratio of EBITDA to net revenue (i.e., EBITDA
is divided by net revenue). An EBITDA margin essentially provides a sense of a
company’s core profitability—a higher EBITDA margin tends to reflect a more profitable
enterprise.
12
     Cox Enters., Inc., 469 F. Supp. 2d at 1107-08.

                                               7
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the cash-flow analysis yielded a value of $236 million for the News-Journal13

which, when combined with the $36 million valuation for Pennysaver, resulted in

an overall valuation of $272 million for NJC. Correspondingly, the district court

valued Cox’s 47.5% interest in NJC at $129.2 million. 14

           At the end of its thorough memorandum and order setting the fair value of

Cox’s shares, the district court requested memoranda from the parties regarding

“what would constitute reasonable terms of purchase”15 given the valuation.16 Both

NJC and Cox abided the court’s request. In its memorandum to the court, NJC

indicated that “the amount necessary to complete the purchase [was]

approximately twice the amount that NJC [could] finance and pay while continuing


13
   The math went as follows: $66,039,483 (gross revenue), multiplied by 24.8%
(normalized EBIDTA margin), multiplied by 14.4 (purchase price-to-EBIDTA ratio
derived from comparable newspaper corporation sales), equals $235,840,202 (normalized
value of the News-Journal).
14
     Cox Enters., Inc., 469 F. Supp. 2d at 1112.
15
     Id.
16
     The district court cited section 607.1436(5), which provides, in pertinent part:

           Upon determining the fair value of the shares, the court shall enter an order
           directing the purchase upon such terms and conditions as the court deems
           appropriate, which may include payment of the purchase price in
           installments, when necessary in the interests of equity, provision for
           security to assure payment of the purchase price and any additional costs,
           fees, and expenses as may have been awarded, and, if the shares are to be
           purchased by shareholders, the allocation of shares among such
           shareholders.

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to operate its newspaper business [rather than liquidating].” 17 NJC urged that

equity required the court to allow payment of the purchase price in installments—a

possibility expressed in the statute. 18 In an earlier motion submitted in anticipation

of the court’s determination of value, NJC had also requested that the court “frame

[the eventual purchase order] in such a way that NJC [would] not have to pay the

valuation amount until Cox’s ownership rights [over the shares were] fully

terminated.”19 NJC sought unrestricted right to Cox’s shares upon payment of the

purchase price to “relieve [itself] of the risk of watching those shares lose value

during an appeal.”20 NJC suggested that “Cox face[d] no similar risk [because] it

[would be] entitled to ‘fair value’ unaffected by post-judgment fluctuations in

share price.” 21



17
  Dist. Ct. Docket No. 6:04-cv-00698-JA-DAB, Doc. 252 at 2. Citations to “Doc.” herein
refer to docket entries in the district court record in this case.
18
   See Fla. Stat. § 607.1436(5) (providing that a purchase order “may include payment of
the purchase price in installments, when necessary in the interests of equity”); see also
Model Business Corporation Act § 14.34, Official Comment (“[M]any courts have
hesitated to award dissolution . . . because of its effects on shareholders, employees, and
others who may have an interest in the continuation of the business . . . [I]t is rarely
necessary to dissolve the corporation and liquidate its assets in order to provide
relief . . . .”).
19
     Doc. 246 at 2-3.
20
     Id. at 9.
21
     Id.

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          In response, Cox requested “full and complete payment . . . immediately,”

with interest accruing on the purchase price from the valuation date until the date

of payment, and the imposition of “conditions . . . by way of security in the

interim.” 22 Cox argued that based on its own valuation expert’s forecast, NJC

could finance immediate purchase consistent with newspaper industry lending

standards.23 Cox attached a sworn statement from the valuation expert that, in turn,

included as exhibits excerpts from NJC’s consolidated financial statements.24

Finally, Cox asserted that “requiring [it] to accept payment in installments would

plainly and unfairly subject [it] to considerable risk,” 25 presumably the risk of loss

in share value pending payment of future installments. Characterizing itself as a

creditor, Cox requested that, in the event the court were to order installment

payments, the order include a number of security provisions, most notably a first

priority security interest in all of NJC’s assets. 26 Cox submitted a proposed order to

this effect. 27


22
     Doc. 253 at 3.
23
     Id. at 6-7.
24
     See id. at Ex. A–1-7.
25
     Id. at 4.
26
     Docs. 261, 261–1.
27
     Doc. 253–3.

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           Following a hearing on the terms of the transfer of Cox’s interest and a

second round of briefing, the court issued a purchase order in compliance with

section 607.1436(5) and dismissed Cox’s suit under section 607.1436(6). 28 Despite

Cox’s request for upfront payment of the purchase price in full, the district court

determined that “[e]ven absent wasteful conduct, NJC would likely not have the

means to be able to pay $129.2 million in one lump sum.” 29 The district court

found that based on industry lending standards NJC did “not have ready assets to

finance a purchase of [Cox’s] shares” to allow for immediate payment. 30 Counsel

for NJC framed the issue well during the hearing:

           [NJC] has a historic EBITDA margin of around 12 percent. The
           company was valued [by the district court] on the basis [of a
           normalized] 24.8 percent EBITDA margin. Lenders lend on EBITDA
           multiples, so [NJC] has to find a way and it struggled mightily to find
           a way to buy a [hypothetical version of itself] that’s outperforming it
           two times over. It had to find a way for a 12 percent EBITDA
           company to buy the shares of a 24.8 percent EBITDA company, and in
           doing that the result is what you would expect. The actual [NJC, a 12
           percent EBITDA company,] trying to buy [the shares of] a
           hypothetical [NJC, a 24.8 percent EBITDA company,] . . . the
           finances don’t mesh up. And no lender lends money based on [what
           the district court says NJC is worth or should be worth—lenders lend
           based on actual EBITDA]. 31

28
     Doc. 262.
29
     Id. at 5.
30
     Id.
31
     Doc. 259 at 17-18 (emphasis added).

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      In light of these limitations the purchase order directed NJC to pay the

$129.2 million purchase price in installments. A first installment payment of $29.2

million was to be made within ten days of either the issuance of the Eleventh

Circuit’s mandate, in the event of an appeal, or the expiration of the time for the

filing of a notice of appeal, in the event no appeal was taken. The remainder of the

purchase price was to be paid in five annual installments of $20 million, plus

accrued interest, each due on the one-year anniversary of the prior payment.

      To safeguard Cox’s position during the repayment period, the court ordered

that Cox, upon receipt of the first installment payment, tender all of its shares of

NJC common stock to NJC in exchange for $100 million in face value preferred

stock with first priority dividends.32 Thereafter, each payment by NJC of an

installment, with accrued interest, was to constitute a redemption of that portion of

Cox’s preferred stock with a face value equal to the principal amount of the

payment. The purchase order also included several affirmative and negative

covenants curbing certain NJC corporate activities during the repayment period.


32
  This at Cox’s request: “Cox suggests that it should retain possession of its NJC shares
until such time as the [c]ourt’s judgment and all related orders concerning payment
therefor become final and are no longer subject to appeal and the judgment is paid,
provided that, in the event the [c]ourt allows the purchase price to be paid in cash
installments, Cox would surrender such shares for cancellation by NJC concurrently with
the first payment therefore by NJC.” Doc. 261 at 3 (Cox’s Proposal Regarding Security
and Return of Stock).

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The purchase order did not grant Cox a security interest in any of NJC’s assets. In

short, despite its repeated requests, the district court did not afford Cox treatment

as a first-priority secured creditor rather than as a shareholder.33

       Although the district court did not refer to NJC’s consolidated financial

statements in the text of the purchase order, those documents were part of the

record before the district court when it issued the purchase order on September 27,

2006. At that time the most recent available financial statements were those

pertaining to NJC’s fiscal year ending December 31, 2005. According to the 2005

balance sheet, NJC had approximately $57.9 million in total assets, $54.6 million

in total liabilities, and $3.3 million in total shareholders’ equity. 34 An

accompanying note to the consolidated financial statements explains that NJC had


33
  See Docs. 253–3, 261 at 1-3.
34
  See Doc. 253–2 at 6. A simplified version of NJC’s consolidated balance sheets from
2004 and 2005 states as follows:
                           NJC Consolidated Balance Sheets
                             December 31, 2005 and 2004
                                                           2005                  2004
     Total Assets                               $ 57,942,798           $ 51,304,042

     Total Liabilities                          $ 54,597,839           $ 48,126,392

     Total Shareholders' Equity                 $   3,344,959          $   3,177,650

     Total Liabilities and Shareholders'
     Equity                                     $ 57,942,798           $ 51,304,042

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at that time recorded as a liability its own “estimated cost to settle [the Cox]

lawsuit through purchasing the common stock of Cox at $29,410,000”35—well

short of the district court’s later $129.2 million valuation of Cox’s interest.

Replacing NJC’s $29.4 million estimate with the eventual $129.2 million purchase

price would yield approximately $57.9 million in total assets, $154.4 million in

total liabilities, and negative $96.4 million in shareholders’ deficit—rather than

equity—on NJC’s 2005 balance sheet. The record also contains NJC’s

consolidated financial statements from 2006 through 2008, 36 which reflect an

increased estimated liability of $129.2 million for NJC’s potential repurchase of

Cox’s shares following the issuance of the purchase order, 37 along with a




35
     Id. at 4.
36
     Doc. 576–4 at 39-89.
37
     See id. at 55, 72, 88-89.

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shareholders’ deficit figure of between negative $80 million and negative $100

million in each year. 38

       Both Cox and NJC appealed the purchase order to this court in Cox I. Cox’s

arguments at that stage focused on defending the district court’s valuation

methodology, which favored Cox, and challenging the district court’s exclusion of

compensation for past director and officer misconduct, as well as its denial of

prejudgment interest.39 Cox did not challenge the district court’s refusal to grant it

a security interest in NJC assets. This court affirmed the purchase order as


38
  See id. at 42, 59, 76. A simplified version of NJC’s consolidated balance sheets from
2006, 2007, and 2008 states as follows:

                        NJC Consolidated Balance Sheets

                        December 31, 2008, 2007, and 2006
                                      2008               2007                2006
Total Assets                $ 50,780,113          $ 59,103,143      $ 60,280,992


Total Liabilities           $ 150,269,279         $ 141,490,729     $ 154,130,171

Total Shareholders'
Deficit                     $ (99,489,166)        $ (82,387,596)    $ (93,849,179)

Total Liabilities and
Shareholders' Deficit       $ 50,780,113          $ 59,103,133      $ 60,280,992


39
  See Brief of Plaintiff-Appellee Cross-Appellant Cox Enterprises, Inc. (Appeal No. 06-
16190); Reply Brief in Support of Cross-Appeal of Plaintiff-Appellee Cross-Appellant
Cox Enterprises, Inc. (Appeal No. 06-16190); see also Cox I, 510 F.3d 1350, 1357-61
(11th Cir. 2007).

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entered. 40 Notably, in rejecting Cox’s request for prejudgment interest this court

highlighted that “[d]uring the period in question, Cox continued actively to

exercise its rights as a shareholder, including the receipt of $2.8 million in

dividends, the receipt of annual audit reports, internal profit and loss reports, and

participation in shareholder meetings.” 41

           The mandate from Cox I issued on April 9, 2008,42 triggering the ten-day

period within which the first payment was due under the purchase order.

Nevertheless, NJC was unable to make the first payment, and “at the [joint] request

of the parties [the district court] repeatedly extended that deadline so that the

parties could attempt to settle and to possibly sell NJC so that the liability to Cox

could be satisfied.” 43 During this period of repeated deadline extensions—spanning

from April 2008 through January 2010—the going-concern value of NJC

plummeted.

           This period of deadline extensions merits explanation in more detail. In

anticipation of the Cox I mandate Cox had filed an emergency motion to appoint a

receiver to oversee NJC’s assets because it “believe[d] that NJC [would] exercise
40
     Cox I, 510 F.3d at 1361.
41
     Id.
42
     Doc. 319.
43
  Cox Enters., Inc. v. News-Journal Corp., No. 6:04-cv-698-Orl-28DAB, 2014 WL
3962694, at *1 (M.D. Fla. Aug. 13, 2014); see Doc. 497—1, 2.

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its right under [Florida Statutes § 607.1436(7)] to file notice of its intent to adopt

articles of dissolution so as to avoid payment to Cox of the ‘fair value’ of Cox’s

shares as determined by the [district court].” 44 In support of its belief, Cox noted

that NJC had unilaterally terminated what appears to have been the only financing

agreement with the potential to support payment according to the terms of the

purchase order.45 The district court denied Cox’s motion as premature, reasoning

that if NJC were to elect dissolution, appointment of a receiver might be

appropriate—in light of           NJC’s   track   record of    corporate     waste   and

mismanagement—but that NJC could only file notice of its intent to adopt articles

of dissolution after the issuance of the Eleventh Circuit’s mandate, subsequent to

which Cox could renew its motion. 46 The parties then filed a joint motion to set

April 21, 2008, as the deadline for NJC to file any notice of intent to adopt articles

of dissolution,47 which the district court granted.48

         On April 21—the deadline—the parties filed an emergency joint motion to

extend the deadline “so as to permit the parties to attempt to resolve [the] case by

44
     Doc. 315 at 2.
45
     See Doc. 315 at 3 (Cox Emergency Motion to Appoint Receiver).
46
     Doc. 318.
47
     Doc. 320.
48
     Doc. 321.

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settlement.” 49 In their joint motion the parties indicated they had entered into a

joint sale agreement on April 18 granting Cox exclusive management and control

over a potential sale intended to satisfy, or partially satisfy, NJC’s liability to Cox

due under the purchase order.50 The joint sale agreement provided for the terms,

conditions, and covenants of the purchase order to remain in effect and for

consideration to be paid to Cox along the following lines in the event of a

successfully consummated sale:

         In Cox’s capacity as a shareholder of [NJC] in connection with the
         [potential sale] and in consideration of Cox’s management of the
         [s]ale process, and in settlement of any and all claims Cox may have
         arising out of or related to the [underlying lawsuit], in the event of a
         successfully consummated [s]ale, Cox shall be entitled to receive from
         the [s]ale [p]roceeds an amount equal to the sum of:

            (a) $22,500,000, increased by 20% of the excess of the [s]ale
                [p]roceeds over $100,000,000, plus

            (b) 47.5% of the [s]ale [p]roceeds. 51

The joint sale agreement also gave Cox exclusive power and authority to terminate

the joint sale process at any time and reinstate the statutory ten-day deadline within

which NJC would have to either make the first installment payment due under the




49
     Doc. 322.
50
     Id.; see Doc. 495–2 (Joint Sale Agreement).
51
     Doc. 495–2 at 5.

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purchase order or file notice of its intent to adopt articles of dissolution. 52 In their

emergency joint motion to extend the deadline the parties represented to the district

court that they had:

            . . . agreed to the potential sale of NJC . . . . It is anticipated that it
           could take several months to determine whether a sale meeting the
           terms and conditions of the joint sale agreement can be procured. If
           the sale takes place pursuant to the joint sale agreement, all issues
           would be resolved and the case dismissed. If the sale does not occur,
           the parties wish to be restored to their current position in the
           litigation. 53

The district court granted the motion, extending the deadline to October 21, 2008,

to permit the parties to proceed with their joint sale agreement. 54 At the parties’

request, the district court instructed the parties to provide a joint report every thirty

days as to the status of the anticipated sale of NJC. 55

           The joint status reports filed over the ensuing months reflect that a formal

sale process for NJC was commenced on August 11, 2008, but was not completed

by the October 21 deadline. 56 On October 15 the parties filed a joint status report to




52
     See id. at 3, 8.
53
     Doc. 322 at 3-4.
54
     Doc. 323.
55
     Id.
56
     See Docs. 331, 354, 369, 411, 434.

                                               19
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this effect and requested a further extension to March 10, 2009,57 which the district

court granted.58 Cox persisted in its role at the helm of the sale process. Although

management presentations and site visits with potential purchasers apparently

resulted in the submission of some bids,59 no sale was consummated, and on

February 24, 2009, Cox (alone) requested another extension of the deadline “to

permit additional time for negotiation with prospective purchasers.” 60 The district

court extended the deadline until May 29, 2009. 61

         This carried on until March 18, 2009, when Cox moved to terminate the

joint sale process and to appoint a receiver to oversee NJC’s assets.62 Following a

hearing,63 the district court granted Cox’s motion on April 17, 2009, 64 again

commencing the statutory ten-day period within which NJC was to either make the

first installment payment due under the purchase order or file notice of its intent to


57
     Doc. 460.
58
     Doc. 461.
59
     Docs. 473, 476, 484.
60
     Doc. 488.
61
     Doc. 489.
62
     Doc. 495.
63
     Doc. 516 (Transcript from Hearing).
64
     Doc. 507.

                                            20
                Case: 14-14115      Date Filed: 07/22/2015   Page: 21 of 41


adopt articles of dissolution. The district court appointed a receiver to manage

NJC’s business, safeguard its assets, and prepare it for sale. Despite the statutory

ten-day deadline, “[a]fter entry of this order, [NJC] neither made a payment to Cox

nor adopted articles of dissolution.”65

         Nor did Cox tender any shares. It remained a shareholder in possession of

NJC common stock. In addition to referring to itself as a shareholder in the joint

sale agreement, 66 Cox continued to receive dividends after the purchase order

issued in 2006.67 And in parallel sanction proceedings regarding charitable

payments and dividends made by NJC in violation of the purchase order, Cox

requested that the court order NJC to declare a constructive proportionate dividend

payable to Cox as a shareholder of NJC 68—a request the district court granted in

part in April 2009. 69

         The sale process continued, now under the direction of the receiver, who

provided the court with monthly status reports from May 2009 through November




65
     Cox II, 666 F.3d 697, 700 (11th Cir. 2012).
66
     See Doc. 495–2 at 5.
67
     See Doc. 292–1 (Notice of Dividends).
68
     See Doc. 312 at 12.
69
     See Doc. 503.

                                              21
                 Case: 14-14115       Date Filed: 07/22/2015   Page: 22 of 41


2009. 70 The receiver’s status reports reflect that the receiver engaged a broker and

that bids from potential purchasers were submitted and considered. The receiver’s

efforts culminated in a joint motion of the receiver and Cox in January 2010

requesting permission to sell the publishing operations of NJC for just over $20

million. 71 Following another round of briefing and a hearing, the district court

granted the joint motion in March 2010 and directed the receiver to execute the

sale. 72 The sale proceeds combined with all other remaining NJC assets totaled

approximately $36 million. 73 In short, following the 2010 sale NJC was worth

roughly one-eighth its estimated value per the district court’s 2006 purchase order.

         Relevant to this appeal, the purchaser did not assume liability for NJC’s

pension obligations and PBGC became the statutory trustee for NJC’s terminated

pension plans and guarantor of its unfunded pension obligations. 74 Cox filed a

claim in the receivership for the $129.2 million due under the 2006 purchase order

and PBGC filed a claim for unfunded pension obligations. The district court


70
     Docs. 523, 524, 528, 537, 569.
71
     Doc. 576; see Doc. 576–2 at 9 (Asset Purchase Agreement).
72
     Doc. 625.
73
  See Cox Enters., Inc. v. News-Journal Corp., No. 6:04-cv-698-Orl-28DAB, 2014 WL
3962694, at *2 (M.D. Fla. Aug. 13, 2014).
74
 See Doc. 652 at 16-17; see also 29 U.S.C. § 1302 (establishing the Pension Benefit
Guaranty Corporation).

                                               22
                 Case: 14-14115    Date Filed: 07/22/2015     Page: 23 of 41


characterized Cox as a first-priority, quasi-secured creditor and ordered the

receiver to distribute all of NJC’s assets to Cox in partial satisfaction of Cox’s

claim. 75 PBGC, along with other smaller creditors, appealed.

         In Cox II, we rejected the conclusion that Cox had an equitable first priority

claim to NJC’s assets, vacated the district court’s order, and remanded the case

with specific instructions. We held, in accordance with section 607.1436(8), that

the election-to-purchase statute “require[s] that any payment made as a result of a

corporation’s share repurchase decision [must] comply with the distribution

requirements of [Florida Statutes § 607.06401], which prohibits the distribution of

corporate assets to a shareholder if it would render the corporation insolvent.” 76

We further held “that Cox qualifies as a shareholder for purposes of the

distributions-to-shareholders statute,” and mandated that the district court “must

consider whether a payment to Cox would comply with the insolvency test

[provided for at section 607.06401(3)] at the time of payment to Cox.”77 We

directed that “[i]f on remand the district court finds a distribution to Cox would

75
   Cox Enters., Inc. v. News-Journal Corp., No. 6:04-cv-698-Orl-28DAB, 2010 WL
3220198, at *3-*4 (M.D. Fla. Aug. 13, 2010) (“Cox has an equitable first priority claim
to all of the assets to be distributed up to the extent of its judgment. Though not expressly
stated in the [purchase order], the [c]ourt’s intent in entering the positive and negative
covenants was to provide security for Cox’s award . . . .”).
76
     Cox II, 666 F.3d at 699 (emphasis added).
77
     Id. at 706, 708.

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                   Case: 14-14115   Date Filed: 07/22/2015   Page: 24 of 41


violate [the insolvency test],” as assessed at the time of payment, “[NJC’s] other

creditors should receive payment before any distribution is made to Cox.”78

          On remand, in an effort to allow the parties to fully develop the record, the

district court referred the case to a magistrate judge to hold an evidentiary hearing

regarding the value of PBGC’s claim. The district court adopted the magistrate

judge’s report and recommendation and valued PBGC’s claim at $13,887,822.00.79

The district court also found that “payment to Cox would violate the insolvency

test” as assessed at the time of payment and, concluding that this court’s mandate

so required, ordered that PBGC’s claim be paid in full first, before any distribution

to Cox. 80

          Cox appeals.

                                             II.

          The law of the case doctrine dictates that “an appellate decision is binding in

all subsequent proceedings in the same case unless the presentation of new

evidence or an intervening change in the controlling law dictates a different result,

or the appellate decision is clearly erroneous and, if implemented, would work a


78
     Id. at 699.
79
     Doc. 794 (Order Adopting Magistrate’s Report and Recommendation).
80
  Cox Enters., Inc. v. News-Journal Corp., No. 6:04-cv-698-Orl-28DAB, 2014 WL
3962694, at *6-*8 (M.D. Fla. Aug. 13, 2014).

                                             24
                Case: 14-14115      Date Filed: 07/22/2015    Page: 25 of 41


manifest injustice.”81 The mandate rule is “a specific application of the law of the

case doctrine.”82 Subject to the three “narrow”83 exceptions mentioned above,

“when an appellate court issues a specific mandate it is not subject to

interpretation; the district court has an obligation to carry out the order.” 84 “The

trial court must implement both the letter and the spirit of the mandate . . . taking

into account the appellate court’s opinion . . . and the circumstances it embraces.”85

“Although the trial court is free to address, as a matter of first impression, those

issues not disposed of on appeal, it is bound to follow the appellate court’s

holdings, both expressed and implied.” 86 Because “[a] mandate may be vague or

precise” depending on the issues presented, where a mandate’s scope is contested

we must “determine the scope of the issues considered in [the prior] appeal.” 87 We




81
     Litman v. Mass. Mut. Life Ins. Co., 825 F.2d 1506, 1510 (11th Cir. 1987) (en banc).
82
     Piambino v. Bailey, 757 F.2d 1112, 1120 (11th Cir. 1985) (alterations omitted).
83
     United States v. Tamayo, 80 F.3d 1514, 1520 (11th Cir. 1996).
84
     Litman, 825 F.2d at 1511.
85
     Piambino, 757 F.2d at 1119.
86
  Transamerica Leasing, Inc. v. Inst. of London Underwriters, 430 F.3d 1326, 1331
(11th Cir. 2005) (internal quotation marks and citation omitted).
87
     United States v. Crape, 603 F.3d 1237, 1241 (11th Cir. 2010).

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                 Case: 14-14115      Date Filed: 07/22/2015   Page: 26 of 41


review de novo the district court’s interpretation and application of this court’s

mandate in Cox II. 88

                                              A.

         Cox first argues that the district court was relieved of its obligation to assess

the insolvency test as of the time of payment because the Cox II panel clearly erred

in so mandating. Cox claims that the purchase order constituted a distribution of

indebtedness from NJC to Cox, the effect of which must be assessed as of the time

the purchase order issued. Cox also claims, as it must, that such a distribution

would not have been prohibited under the insolvency test and therefore later

repayment of the debt must be allowed, even if it would render NJC insolvent as of

the time of payment. Cox also claims that the purchase order transformed it into a

creditor of NJC, even though Cox at all times retained its shares.

         The record before the Cox II panel—specifically, NJC’s balance sheets—

belies Cox’s claims. At no point in time could NJC have reacquired Cox’s shares

by distribution without rendering itself insolvent. The record demonstrates

conclusively that a distribution of indebtedness to Cox in the amount of $129.2

million would have rendered NJC insolvent in 2006. Cox’s position is premised on

construing the purchase order to have directed NJC to make a distribution

prohibited by the statute in the first instance; it is therefore untenable. We cannot

88
     Id. (citing Litman, 825 F.2d at 1511).

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conclude that the district court’s order required this untoward result. 89 Nor can we

conclude that Cox became a creditor when it never relinquished its shares.

                                             1.

         Turning to our holding in Cox II, we have emphasized that the “clear error”

exception must be rarely invoked.90 Accordingly, “in a close case, a court must

defer to the legal conclusion of a coordinate court in the same case; only when the

legal error is beyond the scope of reasonable debate should the court disregard the

prior ruling.”91 Needless to say, this is a high bar.92 We emphasize that our inquiry

is focused on whether the prior panel’s decision was so clearly erroneous that we

cannot construe it as a reasoned outcome. We cannot hold under this exacting

standard that the Cox II panel clearly erred in requiring assessment of the

insolvency test as of the time of payment.




89
   See Durr v. Shinseki, 638 F.3d 1342, 1344 (11th Cir. 2011) (“[T]he law tries to avoid
absurd results.”); cf. Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 575 (1982)
(“[I]nterpretations of a statute which would produce absurd results are to be avoided if
alternative interpretations consistent with the legislative purpose are available.”).
90
     Jenkins Brick Co. v. Bremer, 321 F.3d 1366, 1370 (11th Cir. 2003).
91
     Id. at 1370-71.
92
  See, e.g., Parts & Elec. Motors, Inc. v. Sterling Elec. Inc., 866 F.2d 228, 233 (7th Cir.
1988). (“To be clearly erroneous, a decision must strike us as more than just maybe or
probably wrong; it must . . . strike us as wrong with the force of a five-week-old,
unrefrigerated dead fish.”).

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                                           2.

         The Florida Business Corporation Act, codified at Florida Statutes § 607 et

seq., largely tracks the language of the Model Business Corporation Act. Florida’s

election-to-purchase statute requires that “[a]ny payment by the corporation

pursuant to an order under subsection (3) or subsection (5) . . . is subject to the

provisions of [section] 607.06401,” the distributions-to-shareholders statute. 93 It is

undisputed that the purchase order in this case was issued under subsection (5) of

the election-to-purchase statute. Correspondingly, “any payment” made pursuant to

the purchase order is subject to the provisions of the distributions-to-shareholders

statute.

         As the Cox II panel identified, “the [distributions-to-shareholders] statute

essentially provides that corporate assets may not be distributed to shareholders if

the distribution would render the corporation insolvent.”94 The insolvency test

contained in the distributions-to-shareholders statute generally forbids a

distribution of indebtedness to a shareholder if such distribution: (a) would render

the corporation unable to pay its debts as they become due in the usual course of

business (so-called “equity insolvency”), or (b) would, when added as a debt to the

liabilities column of the corporation’s balance sheet, cause the corporation’s total

93
     Fla. Stat. § 607.1436(8).
94
     Cox II, 666 F.3d at 703.

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                 Case: 14-14115      Date Filed: 07/22/2015        Page: 29 of 41


liabilities to exceed the corporation’s total assets (so-called “balance sheet

insolvency”). 95

         The distributions-to-shareholders statute also contains default timing

provisions for when the insolvency test must be assessed with regard to a particular

distribution.96 “In the case of distribution by purchase, redemption, or other

acquisition of the corporation’s shares,” the default rule requires assessment of the

insolvency test as of the earlier of:

         1. The date money or other property is transferred or debt incurred by
            the corporation, or

         2. The date the shareholder ceases to be a shareholder with respect to
            the acquired shares . . . . 97


95
  See Fla. Stat. at § 607.06401(3) (treating senior liquidation preferences as liabilities
unless the articles of incorporation provide otherwise). Subsection (3) provides in full:

         No distribution may be made if, after giving it effect:

                (a) The corporation would not be able to pay its debts as they
                become due in the usual course of business; or

                (b) The corporation's total assets would be less than the sum
                of its total liabilities plus (unless the articles of incorporation
                permit otherwise) the amount that would be needed, if the
                corporation were to be dissolved at the time of the
                distribution, to satisfy the preferential rights upon dissolution
                of shareholders whose preferential rights are superior to those
                receiving the distribution.
96
     Id. at § 607.06401(6).
97
     Id. at § 607.06401(6)(a).

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In short, where the default timing provisions apply a corporation cannot purchase

shares by making a distribution of indebtedness to a shareholder if such

distribution would cause the corporation’s total liabilities to exceed its total assets

as of the time the debt is incurred.

         Under the statutory scheme subsection (8) offers a workaround for

corporations seeking to overcome this default rule. Subsection (8) provides that:

          . . . indebtedness . . . including indebtedness issued as a distribution,
         is not considered a liability for purposes of [the insolvency test] if its
         terms provide that payment of principal and interest are made only if
         and to the extent that payment of a distribution to shareholders could
         then be made under this section. 98

A corporation can escape the statute’s general prohibition by distributing

indebtedness to a shareholder on the condition that any future payment of principal

and interest is treated as a distribution that must comply with the distributions-to-

shareholders statute. In essence, the statutory structure affords an alternative to a

corporation, allowing it to make an otherwise forbidden distribution of

indebtedness by kicking down the road assessment of the insolvency test, which

operates as to each future payment on the debt. 99 The exception provides that


98
     Id. at § 607.06401(8).
99
   See Model Business Corporation Act § 6.40, Comment 8.B (“[I]t is anticipated that
[the subsection (8) exception] will be applicable most frequently to permit the
reacquisition of shares of the corporation at a time when the deferred purchase price
exceeds the net worth of the corporation.”).

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“each payment of principal or interest is treated as a distribution, the effect of

which is measured on the date the payment is actually made.”100 This plain

language reading of the statute controls our decision. It is also faithful to the

purpose claimed for the statute by the drafters of the Model Business Corporation

Act adopted by Florida.

         At issue here, the Cox II panel concluded that upon issuance of the purchase

order NJC “had a debt of $129.2 million owed Cox to be paid in regular

installments,” that “[t]his indebtedness of [NJC] triggered the timing provision

of [subsection (8)],” and that the insolvency test must be assessed “at the time of

payment to Cox.” 101

                                              3.

         The circumstances of this case fit imperfectly with our plain language

reading of the statutory scheme. This for several reasons. First, although the

election-to-purchase statute provides that “[t]he purchase ordered . . . shall be

made within 10 days after the date the order becomes final unless, before that time,

the corporation files with the court a notice of its intention to adopt articles of

dissolution,”102 the parties in this case repeatedly—and jointly—requested and


100
      Fla. Stat. § 607.06401(8) (emphasis added).
101
      Cox II, 666 F.3d at 707-08.
102
      Fla. Stat. § 607.1436(7) (emphasis added).
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received extensions of that deadline. By all accounts it appears that Cox initiated

and sustained these requests in its effort to stave off the dissolution of NJC. After

NJC terminated what appears to have been the only financing agreement with the

potential to support payment according to the terms of the purchase order, 103 it

became apparent that dissolution was imminent. At this juncture Cox faced two

alternatives. On one hand, if NJC were to adopt articles of dissolution, Cox would

revert to its position as a minority shareholder with a 47.5% equity interest in the

actual value of the dissolved corporation and the right to “continue to pursue any

claims previously asserted.”104 In this scenario Cox’s reversionary position would

have been much less valuable than its position as valued under the purchase order

and the joint sale agreement—a position premised on normalized EBITDA figures

per the district court’s valuation methodology and the joint sale agreement’s

provision for ample consideration to Cox in the event of a consummated sale. The

disparity between these two alternatives increased over time as the value of NJC

declined precipitously. Seeking to avoid the reversionary fate it faced under

dissolution, Cox endeavored alongside NJC to confect a joint sale of the

corporation that would allow NJC to satisfy, or partially satisfy, its liability due



103
      See Doc. 315 at 3 (Cox Emergency Motion to Appoint Receiver).
104
      Fla. Stat. § 607.1436(7).

                                           32
                 Case: 14-14115      Date Filed: 07/22/2015   Page: 33 of 41


Cox as a shareholder as set out in the purchase order.105 Cox in essence made a

business judgment to bet on the prospect of a sale that could provide a greater

return than dissolution.

         Second, and as a result of the parties’ joint requests to extend the deadline,

Cox never relinquished its shares. Cox’s theory of the case—that under the default

timing rule insolvency must be assessed as of the time the purchase order issued—

is in tension with the plain language of the distributions-to-shareholders statute,

which provides that the default timing provisions apply “[i]n the case of

distribution by purchase, redemption, or other acquisition of the corporation’s

shares.”106 This language appears to presuppose that the recipient of such a

distribution relinquishes its shares when the corporation purchases, redeems, or

otherwise acquires them. 107 That did not happen here. Cox retained its shares and,

indeed, continued to receive dividends and constructive dividends as a shareholder

long after the purchase order issued.

         Third, and admittedly cutting somewhat against this court’s reasoning in Cox

II, the purchase order did not contain on its face terms explicitly invoking the

105
      See Cox II, 666 F.3d at 700.
106
      Id. at § 607.06401(6)(a) (emphasis added).
107
   Cf. Model Business Corporation Act § 6.40, Comment 8.B (“In an acquisition of its
shares, a corporation may transfer property or incur debt to the former holder of the
shares.”) (emphasis added).

                                              33
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subsection (8) exception. As Cox and amici point out, the plain language of the

statutory scheme appears to allow a corporation to invoke the subsection (8)

exception as to a distribution of indebtedness only if “its terms provide that

payment of principal and interest are made only if and to the extent that payment of

a distribution to shareholders could then be made under this section.” 108

         Finally, and key to this case, the record makes clear that, were the $129.2

million debt to have hit NJC’s books as a liability at the time the purchase order

issued, it would have caused NJC’s total liabilities to exceed its total assets,

resulting in a shareholders’ deficit of nearly $100 million. 109 We cannot conclude

that such a distribution would have been allowed under the distributions-to-

shareholders statute if its effect were measured as of the time the purchase order

issued. To the extent that the relevant distribution in this case constitutes a

distribution of indebtedness from NJC to Cox at the time the purchase order issued,

such a distribution would have been forbidden unless analyzed under the

subsection (8) exception.




108
      Fla. Stat. § 607.06401(8) (emphasis added).
109
  See NJC Consolidated Balance Sheets for 2005, 2006, 2007, and 2008, supra notes 34
& 38.

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                                          4.

      Given the unique circumstances of this case, the scope of reasonable debate

allows for two constructions of the district court’s purchase order. First, the

purchase order can reasonably be construed to direct NJC to, in the future, make a

series of payments to Cox in exchange for Cox’s common-stock shares—

distributions that have yet to occur, as it remains undisputed that NJC has made no

payment and Cox has tendered no shares. Under this construction the relevant

initial distribution for purposes of assessing the insolvency test is the inchoate first

installment payment from NJC to Cox in the amount of $29.2 million. Along these

lines it matters not whether the purchase order invoked the subsection (8)

exception, because the purchase order would not have constituted a distribution of

indebtedness at the time it was issued. It would not at that time have constituted a

distribution at all. Although it traverses a different route than that taken in Cox II,

this construction converges on the same result reached there: insolvency must be

assessed as of the time of payment to Cox.

      Second, the purchase order can reasonably be construed to have constituted

a distribution of indebtedness from Cox to NJC at the time it was issued that

invoked the subsection (8) exception. This second construction resists the

conclusion that the district court directed NJC to make a distribution prohibited

under the statute. Under this construction the relevant distribution for purposes of

                                          35
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assessing the insolvency test is any future payment made in satisfaction of the

$129.2 million distribution of indebtedness from NJC to Cox incurred upon

issuance of the purchase order. And again, under this construction insolvency must

be assessed as of the time of repayment of the debt to Cox under the provisions of

subsection (8). The Cox II panel adopted this second construction.

          Cox cries foul at the Cox II panel’s apparent reliance on subsection (8)

viewed in isolation because the terms of the purchase order itself do not expressly

invoke the subsection (8) exception. What Cox looks past is the prior panel’s

simultaneous emphasis on the “overall scheme” set forth in sections 607.1436 and

607.06401 and that scheme’s interaction with the unique circumstances of this

case.110 Again, to our eyes, to the extent that the relevant distribution in this case

constitutes a distribution of indebtedness from NJC to Cox at the time the purchase

order issued, such a distribution would have been forbidden unless analyzed under

the subsection (8) exception. We construe the holding of Cox II to be consistent

with this reasoning.

          As to whether the “terms” of the indebtedness at issue invoked the

subsection (8) exception, Cox also steps past the prior panel’s express focus on the

“plain language” of the election-to-purchase statute,111 which provides that “[a]ny


110
      See Cox II, 666 F.3d at 703.
111
      Id. at 705.
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payment by the corporation pursuant to [a purchase] order” under that section is

subject to the provisions of the distributions-to-shareholders statute. 112 In

discussing whether each installment payment under the purchase order would

constitute a payment to a shareholder for purposes of invoking the distributions-to-

shareholder statute, the panel identified an “arguable conflict” among the

provisions of the election-to-purchase statute. 113 We understand that in its effort to

resolve that conflict the prior panel sought to “give effect to the Florida

legislature’s intent and accord meaning to all parts of the statute” by interpreting a

“payment” made pursuant to a purchase order under section 607.1436(5) to qualify

as a “payment” under section 607.06401(8) that must undergo the insolvency test

as assessed at the time of “payment.” 114

         Acknowledging the purchase of alternative interpretations, in light of the

imperfect fit between the unique circumstances of this case and our plain language

reading of the statutory scheme we cannot hold that the panel clearly erred in



112
      Fla. Stat. § 607.1436(8) (emphasis added); see Cox II, 666 F.3d at 707.
113
   See Cox II, 666 F.3d at 706 (highlighting “an arguable conflict between [sections]
607.1436(6) and (8)”).
114
    See id. at 704 (citing Larimore v. State, 2 So.3d 101, 106 (Fla.2008); Forsythe v.
Longboat Key Beach Erosion Control Dist., 604 So.2d 452, 455 (Fla.1992)), 707-08; see
also McGhee v. Volusia Cnty., 679 So.2d 729, 730 n.1 (Fla. 1996) (“The doctrine of in
pari material requires the courts to construe related statutes together so that they
illuminate each other and are harmonized.”).

                                              37
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charting the reasonable course it chose. The district court was obligated to obey the

mandate of Cox II and did so.

                                             B.

         Cox next argues that even if distribution according to the terms of the

purchase order is barred by the insolvency test, its resulting claim in the assets of

NJC held by the receiver must be treated “at parity” with that of PBGC. Cox relies

on section 607.06401(7), which provides that “[a] corporation’s indebtedness to a

shareholder incurred by reason of a distribution made in accordance with this

section is at parity with the corporation’s indebtedness to its general, unsecured

creditors except to the extent subordinated by agreement.” The district court held

that this argument was foreclosed by this court’s clear mandate. We agree.

         The matter of relative claim priority between Cox and PBGC was within the

scope of issues considered and decided in Cox II115—indeed, it can be fairly said

that relative claim priority comprised the essence of PBGC’s appeal. Among the

stated “issues on appeal” in Cox II was the following: “[W]hether the district court

erred by granting Cox an equitable first priority claim to [NJC’s] assets to the

exclusion of other creditors.”116 Although the Cox II panel did not address section


115
    See Transamerica Leasing, 430 F.3d at 1332 (“The law of the case doctrine
applies . . . if our prior opinion determined, explicitly or by necessary implication, [the
relevant issue].”).
116
      Cox II, 666 F.3d at 700-01.
                                             38
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607.06401(7) by name, it explicitly resolved the matter of relative claim priority

when it directed that “[i]f on remand the district court finds a distribution to Cox

would violate [the insolvency test], [NJC’s] other creditors should receive

payment before any distribution is made to Cox.” 117 The district court fully heeded

this instruction and properly held that this court’s plain command foreclosed Cox’s

contrary argument.

                                             III.

         As a final matter, Cox mounts an equitable challenge to the district court’s

order directing NJC to pay PBGC’s claim in full. As Cox’s challenge pertains to

the district court’s distribution of assets in a receivership, we review for an abuse

of discretion. 118 We, like the magistrate judge and district court below, reject this

argument quickly. The         magistrate    judge   issued    a   thorough     report   and




117
    Id. at 699 (emphasis added). Cox avers that this statement is nonbinding dicta because
in sequence it appears at the beginning of the opinion and, as Cox argues, was not
necessary to the holding. We cannot agree. It is not the case that “[t]he remainder of the
opinion never addresse[d]” relative claim priority. See United States v. Seher, 562 F.3d
1344, 1361 (11th Cir. 2009). As stated, relative claim priority was among the issues
expressly designated for appeal. Moreover, the opinion contains numerous other
consistent statements that reinforce the statement cited here. Accord Cox II, 666 F.3d at
707 (“If enforcing Cox's repurchase order would require a payment by [NJC] in violation
of the distributions-to-shareholders statute, the statute forbids the payment.”).
118
      Godfrey v. BellSouth Telecomms., Inc., 89 F.3d 755, 757 (11th Cir. 1996).

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recommendation as to the value of PBGC’s claim. 119 This included an express

finding that PBGC’s proffered valuation was calculated in accordance with Title

IV of ERISA 120 and PBGC’s own regulations. 121 The district court adopted the

magistrate’s report and recommendation 122 and Cox does not now dispute its

validity. Rather, Cox asserts that we should overturn the district court’s order

because “it would have been equally permissible” for the district court to have

exercised its equitable discretion to reduce the amount awarded on PBGC’s claim

once valued. Even assuming, without deciding, that such an approach would have

been permissible, Cox does not persuade that the district court abused its wide

discretion in rejecting that approach in light of this court’s mandate in Cox II.123

                                             IV.




119
      Doc 791.
120
      See 29 U.S.C. § 1301(a)(18).
121
      See 29 C.F.R. § 4044.41-.75.
122
      Doc. 794 (Order Adopting Magistrate’s Report and Recommendation).
123
    Without citing authority from this Circuit, Cox persists that PBGC’s claims are
equitably moot because in order to obey the Cox II mandate on remand the district court
had to unwind its prior order directing distribution to Cox. We disagree. “Central to a
finding of mootness is a determination by an appellate court that it cannot grant effective
judicial relief.” In re Club Associates, 956 F.2d 1065, 1069 (11th Cir. 1992). Cox’s
argument is belied by the district court’s valid and effective order on remand, which
directed Cox to “pay $13,887,822.00 into the registry of [the] [c]ourt.”

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      We AFFIRM the district court’s order and judgment. In doing so we remind

that finality and justness of result are not warring principles. There are limits to the

ability of able counsel to rescue a client from a soured investment. Today we reach

those limits.




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