BBX Capital v. Federal Deposit Insurance Corp.

Case: 19-11172 Date Filed: 04/07/2020 Page: 1 of 26 [DO NOT PUBLISH] IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT ________________________ No. 19-11172 ________________________ D.C. Docket No. 0:17-cv-62317-JIC BBX CAPITAL, f.k.a. BankAtlantic Bankcorp, Inc., Plaintiff - Appellant, versus FEDERAL DEPOSIT INSURANCE CORP, in its corporate capacity, BOARD OF GOVERNORS OF THE FEDERAL RESERVE BOARD, Defendants - Appellees. ________________________ Appeal from the United States District Court for the Southern District of Florida ________________________ (April 7, 2020) Before ROSENBAUM, JILL PRYOR, and BRANCH, Circuit Judges. PER CURIAM: Case: 19-11172 Date Filed: 04/07/2020 Page: 2 of 26 This case concerns severance payments that Plaintiff-Appellant BBX Capital (“BBX”) seeks to make to five former executives of BankAtlantic (the “Bank”), a federally insured savings bank that BBX’s predecessor-in-interest, BankAtlantic Bancorp Inc. (“Bancorp”), used to own. Those severance payments were part of a 2011 Stock Purchase Agreement (the “SPA”) that sold the Bank to BB&T Corporation (“BBT”). At that time, however, the Bank was operating in a “troubled” condition, and both the Bank and Bancorp were operating under consent orders that prohibited them from making any so-called golden parachute payments absent approval by the Federal Reserve Bank (the “FRB”) and concurrence by the Federal Deposit Insurance Corporation (the “FDIC”; together with the FRB, the “agencies”). The SPA also called for BBT to reimburse BBX for any severance payments made to the executives. After the sale of the Bank was finalized, the FDIC notified BBX that it considered the severance payments to be golden parachute payments and that it would approve payments of only twelve months of salary to each executive, significantly less than what the SPA called for. The FDIC also concluded that BBT was required to seek and receive approval before making the reimbursement payments to BBX. Subsequently, the FRB approved the same payment amounts but took no action with respect to approving any payments over 12 months of salary because the FDIC had already prohibited any additional payments. 2 Case: 19-11172 Date Filed: 04/07/2020 Page: 3 of 26 BBX then filed this action claiming that the agencies’ decisions were arbitrary and capricious and violated due process. The district court dismissed BBX’s action against the FRB for lack of standing because FRB had not injured BBX, and the court granted summary judgment in favor of the FDIC. BBX now appeals. After careful review of the record and the briefs, we affirm. I. A. Legal Framework In 1990, Congress added Section 1828(k) to Title 12. That section provides that “the [FDIC] may prohibit or limit, by regulation or order, any golden parachute payment or indemnification payment” to institution-affiliated parties (“IAPs”), including “any director, officer, [or] employee” of the insured bank. 12 U.S.C. §§ 1828(k), 1813(u). As relevant here, “golden parachute payment” means the following: (A) [A]ny payment (or any agreement to make any payment) in the nature of compensation by any insured depository institution or covered company for the benefit of any institution-affiliated party pursuant to an obligation of such institution or covered ...

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