Eleventh Circuit Court of Appeals Reverses Judgment Against BBX Capital and Alan B. Levan

FORT LAUDERDALE, FL--(Marketwired - September 29, 2016) - BBX Capital Corporation ("BBX" or the "Company") (NYSE: BBX) announced today that it has won its appeal in the Eleventh Circuit Court of Appeals in the action brought against the Company and Alan Levan by the SEC. Today's decision reversed two highly unusual pretrial orders entered at the behest of the SEC which, as the Eleventh Circuit points out, violated fundamental legal principles.

In setting aside the judgment, the penalties imposed by the district court were reversed as well, including the two year officer and director bar imposed on Alan Levan and the monetary penalties assessed against BBX in the amount of $4.55 million and against Alan Levan in the amount of $1.3 million.

Alan Levan stated that, "I am grateful the 11^th Circuit Court of Appeals recognized, as we had all along, that we were right about the pretrial rulings."

BBX counsel, Eugene Stearns added, "While the decision leaves open the possibility of a new trial, it decimates any ability of the SEC to win. In light of this decision we would certainly hope that the SEC will recognize the futility and unreasonableness of further pursuit of this litigation and if it is pursued we have little doubt about the outcome."

One of the two matters reversed by the appellate court was the summary judgment that three sentences spoken by Alan Levan during a lengthy earnings conference call in July 2007 violated securities laws. No witness testified that the words that were spoken were false. In fact, when asked at trial if the words were false, the SEC's own expert witness said he would not go that far. Most importantly, the three sentences were a small part of a huge volume of disclosures on the same subject, all of which timely and correctly provided investors with the information necessary to make an investment decision. The SEC's claims that these other disclosures were false but were rejected by the jury in December, 2014.

The second matter related to a technical accounting issue where the SEC contended that BBX should have treated certain loans as held for sale instead of held for investment for the year ended December 31, 2007. BBX sought and relied upon the advice of its accountants as to how to treat these loans and followed that advice. PricewaterhouseCoopers issued an unqualified audit opinion for 2007 after being consulted regarding the accounting issues. Even after the SEC filed its action, PricewaterhouseCoopers never withdrew its audit opinion and the financial statements were never required to be restated. The Eleventh Circuit concluded that BBX and Mr. Levan were entitled to prove as a defense that they sought and relied upon the advice of PricewaterhouseCoopers with respect to the accounting issues raised by the SEC.