Cox Enter. v. News-Journal Corp.

This appeal stems from a dispute between Cox and PBGC over the now-defunct newspaper publisher, NJC. Florida's 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. 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. The district court adopted the magistrate judge’s report and recommendation and valued PBGC’s claim at $13,887,822.00. 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. The court affirmed the district court’s order and judgment. View "Cox Enter. v. News-Journal Corp." on Justia Law