BX Capital Statements On Verdict;BFC Financial&BBX Capital Terminate Merger Deal

(RTTNews) - BBX Capital Corp. (BBX) announced that, following a six week trial in federal court in Miami, a jury rendered a split decision in a federal securities case brought against BBX and its Chairman, Alan Levan.

The issues in the case arose out of loan losses reported by BankAtlantic in October 2007, driven by the dramatic collapse of the Florida real estate market.

The jury found in favor of BBX and Levan with respect to all of its disclosures preceding the market collapse except for three sentences uttered by Alan Levan in BBX's lengthy July 25, 2007 earnings conference call. With respect to that conference call, prior to the jury's deliberations, the judge instructed the jury that the three sentences were "objectively false," a conclusion vigorously disputed by BBX and Mr. Levan.

In commenting on that part of the verdict finding against him, Alan Levan said that, "A decent and hard working group of jurors was misled by a jury instruction that is just wrong. What I told investors in July was true. I provided a candid view of what I believed faced the company and, when the housing market crashed a few weeks later, what I said was proved correct. BBX was one of the first companies to recognize the severity of the housing market crash and accept the losses most others ignored for many months. If this part of the verdict is allowed to stand, no officer of any public company could ever again safely participate in earnings conference calls."

BBX noted that the identical jury instruction was given in the private securities litigation which preceded this case. After enduring a similar jury outcome, BBX and Levan ultimately prevailed in that case.

The jury also found that BBX made a decision to sell loans in the fourth quarter of 2007 and thereafter failed to treat those loans as "held for sale" rather than "held for investment."

With respect to that claim, Levan stated that, "We explored selling loans in that period as one of many possible strategies to deal with the collapsing real estate market. We followed the accounting guidance, booked the loans appropriately and, early in 2008, recognizing that there was no market to sell any of these loans at any price, never thereafter considered selling these loans as a viable strategy. I am not an accountant and do not participate in accounting decisions for the company. I am very confident this part of the verdict will be corrected down the road as well."

BBX also noted that some news stories following the verdict have misconstrued the form of verdict. The SEC prevailed on a single disclosure issue -- the three sentences in the July 2007 conference call -- that is repeated in a series of essentially similar questions. The SEC also prevailed on a single held for sale issue that is repeated in a series of similar questions.

The Company and Levan will file motions to enter judgment in their favor on all counts and if these motions are denied will bring the issues to the 11th Circuit Court of Appeals in Atlanta.

As a result of the time frames involved in the appeal of the verdict, the Boards of Directors of BFC Financial Corp. and BBX Capital mutually agreed to terminate the companies' proposed merger contemplated by the May 7, 2013 merger agreement between the parties.