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

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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 20073 and 20124 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).

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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 

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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 spinoff 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 fiveyear 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.

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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).

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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 NewsJournal at that time had an actual EBITDA margin11 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.

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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.

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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.

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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 NJC68—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.

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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).

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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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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).

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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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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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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-toshareholders 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).

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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).

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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-toshareholders 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 

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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-toshareholder 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.”).

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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.

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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 ERISA120 and PBGC’s own regulations.121 The district court adopted the 

magistrate’s report and recommendation122 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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