Opinion
No. 96-513-CIV-T-23B
October 22, 1996
ORDER
The Securities and Exchange Commission (SEC) appeals from an order of the bankruptcy court in a dischargeability controversy arising primarily under 11 U.S.C. § 523(a)(2)(A). The bankruptcy court denied the SEC's motion for summary judgment and granted the (Bilzerian). As a result of the bankruptcy court's order, the disgorgement judgment granted by the United States district court in the District of Columbia is discharged.
In addressing this appeal, this court has studied the briefs and the accompanying record and entertained oral argument. Yet one more recitation of the factual and procedural history of this case would avail no one because this controversy has undergone litigation to the point of protracted extreme. See e.g., United States v. Bilzerian, 926 F.2d 1285 (2d Cir. 1991); Securities and Exchange Commission v. Bilzerian, 29 F.3d 689 (D.C. Cir. 1994). More litigation is inevitable. Bilzerian characterizes the litigation as a singular episode of persecution. The SEC characterizes the litigation as the tireless, conscientious, and principled pursuit of justice. In either case, a prompt result is due.
In this case, Bilzerian misled the securities market by incomplete or otherwise misleading disclosures and by other, specific tactics, such as "parking shares," which resulted, in sum, in a fraud on the market. These tactics and the attendant misrepresentations resulted in an artificial inflation of the price of shares, including Bilzerian's, that were bought by "white knights" with the objective of defeating a presumptive, hostile takeover. The material misstatements and the like by Bilzerian foreseeably were relied upon justifiably by the market. Transactions resulted. Basic Inc. v. Levinson, 485 U.S. 224 at 247-48, 108 S.Ct. 978 at 991-92 (1988) (n. 24, 25, 26 and accompanying text). For this meretricious adventure, Bilzerian was criminally prosecuted and, consequent upon his convictions. held accountable for disgorgement of his tainted gains. The resulting judgment hovers around $32,000,000.00 without consideration of judgment interest and the like.
The history of this litigation establishes that each issue necessary to defeat discharge of this debt has been proven and has become preclusive in its effect on any further attempt to litigate that issue to a different result or in another forum. No outstanding reason exists to relieve Bilzerian of the collateral estoppel effect of the SEC's prior enforcement success. Each element of issue preclusion is amply present in this record.
I disregard any determination that the claim against Bilzerian for his gain is not one for "money."
The judgment of the bankruptcy court is REVERSED. This action is remanded to the bankruptcy court for entry of a summary judgment determining that the disgorgement judgment entered by the district court in the District of Columbia is nondischargeable in accordance with 11 U.S.C. § 523(a)(2)(A).
ORDERED in Tampa, Florida, on October 22d 1996.