Paul Bilzerian

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Paul Bilzerian
Paul Bilzerian mugshot.jpg
Born1950 (age 71–72)
Terri L. Steffen
(m. 1978)

Paul Alec Bilzerian (Armenian: Փօլ Պիլզերեան, born 1950) is an American businessman and corporate takeover specialist.[1]

Convicted of failing to make complete and timely disclosures on Schedule 13(d) filings related to unsuccessful takeover attempts of Cluett, Peabody and Company and Hammermill Paper Company in the 1980s, Bilzerian served a 13-month prison sentence and was also ordered to disgorge his profits, leading him to bankruptcy and a 32-year legal battle with the Securities and Exchange Commission.[2] Bilzerian has spent the past 33 years maintaining that he is factually and legally innocent.

Education and family[edit]

Bilzerian was born in Miami, Florida but grew up in Worcester, Massachusetts in an Armenian American family.[3] His father, a civil servant, and his mother later divorced, leading to troubled teenage years for Bilzerian; he would later describe himself as a "juvenile delinquent".[4] Called into the principal's office of his high school one day in 1968 for violating the dress code by wearing blue jeans, Bilzerian responded by dropping out of school.[5]

However, after serving in the Vietnam War and earning a Vietnamese Gallantry Cross, Bronze Star Medal, and Army Commendation Medal,[2] he went to college and earned a Bachelor of Arts with Honors in Political Science and graduated With Distinction from Stanford University in 1975.[4] Bilzerian entered Harvard Business School that same year. He was unsure about his choice to attend, having passed on offers of admissions to several law schools to enroll at HBS.[5] After his graduation, Bilzerian married Stanford classmate Terri L. Steffen in 1978, and moved with her to St. Petersburg, Florida.[4]

Bilzerian has two sons, Adam and Dan Bilzerian. Both Adam and Dan went on to careers as professional poker players.[6]

In June 2014, Bloomberg News reported that Paul Bilzerian had become one of the licensed service providers who processed applications for the same Saint Kitts and Nevis citizenship-by-investment program which his son had used. The report added that Bilzerian had gone on to process a citizenship-by-investment application for Bitcoin investor Roger Ver, and that the two men had co-launched a website through which customers could use Bitcoins to pay for the fees and the real estate purchase in the citizenship-by-investment program.[7] The government of Saint Kitts and Nevis responded in a statement the following week that Bitcoin was not an acceptable payment method for participation in the program.[8]


One of Bilzerian's first business deals was an investment in the 1970s in a Tampa Bay-area radio station, WPLP, which he made with two Army colleagues from the Vietnam War who had experience in the broadcasting industry.[5] However, in a dispute over control, Bilzerian left in the late 1970s to join his father-in-law in the real estate business. After Bilzerian left the station its performance deteriorated which led to its bankruptcy and a lawsuit by Bilzerian against his former partners.[4] Bilzerian's real estate investments were highly successful and led to the beginning of his fortune.[9] In 1984, he moved to Sacramento, California where his father-in-law and another business associate lived.

Corporate takeovers[edit]

While living in Sacramento, in 1985 Bilzerian embarked on his first two high-profile takeover attempts, one of New York clothing manufacturer Cluett Peabody & Company, and the other of Pittsburgh construction company H. H. Robertson. After Bilzerian purchased a large stake and raised his bid for the remaining 76% of Cluett Peabody in October,[10] Cluett Peabody's board of directors adopted poison pill provisions, earning them public criticism from Bilzerian.[11] Cluett Peabody eventually accepted a competing merger offer by WestPoint Pepperell (now WestPoint Home) for $41 per share (in cash or equivalent value of WestPoint Pepperell common stock); Bilzerian and his fellow investors agreed separately to sell their stake to WestPoint Pepperell for $40 per share plus reimbursement of $7.5 million in expenses.[12]

Bilzerian moved back to Florida in 1986.[4] That July he and fellow investors William and Earle I. Mack (sons of New Jersey real estate developer H. Bert Mack)[13] launched a takeover bid against the Hammermill Paper Company, purchasing about 3.3 million Hammermill shares at an average price of roughly $47 per share, and then offering $900 million ($52 per share) to purchase the remainder of the company. Bilzerian's offer was ultimately rejected when Hammermill sold out to International Paper instead at $64.50 per share, but Bilzerian and his fellow investors still made a profit of more than $60 million from the deal.[14]

Singer Corporation[edit]

In 1987, Bilzerian began a takeover of defense electronics manufacturer Singer Corporation. In October 1987, it came to light that a group of investors led by Bilzerian had purchased 2.1 million Singer shares in the preceding two months. Singer seemed an unlikely target for a takeover; early reports cast doubt on the idea that the government would permit a hostile takeover of a defense contractor, and the company had already moved its headquarters from Connecticut to takeover-hostile New Jersey in an attempt to fend off a previous takeover by T. Boone Pickens.[9] In January 1988, Pickens provided $150 million in financing which helped Bilzerian acquire Singer.[15]

Singer chairman Joseph B. Flavin had died in early October, leaving the company unprepared for Bilzerian's cynical move. The Black Monday crash less than two weeks later spooked competing investors.[16] But the United States government chose to grandfather Bilzerian's hostile bid, preventing the Omnibus Budget Reconciliation Act of 1987 from disallowing sales of assets in certain acquired businesses to be treated as capital gains for tax purposes.[16]

Stock parking case[edit]

In 1986, the government stumbled onto an insider trading scheme whereby a Drexel Burnham investment banker named Dennis Levine was exchanging inside information for suitcases of cash from Ivan Boesky.[17] This led to an indictment of Boyd Jefferies, the Owner & Chairman of Jefferies & Company.[18] Jefferies cut a deal to testify against three individuals in the corporate and investment banking community, including Bilzerian.[19] The SEC then went after Bilzerian – focusing its investigation on whether he had failed to timely make two Schedule 13(d) filings and whether he was required to disclose investors in his partnerships.[20]

In May 1988, the SEC began a probe against Edward J. DeBartolo, Sr. to determine whether DeBartolo had illegally aided Bilzerian's hostile takeover attempts through "stock parking", in which one party purchases shares in coordination with another to keep legal ownership separated and avoid either party's holdings exceeding disclosure thresholds.[21] Then, in December 1988 Rudy Giuliani announced that Bilzerian had been indicted in Manhattan by a federal grand jury for Schedule 13(d) disclosure violations with respect to Cluett Peabody and Hammermill Paper Company[20] and general claims regarding failed takeovers of H. H. Robinson and Armco.[22] Bilzerian claims he was "the first person ever to be indicted for 13d disclosure violations as the hundreds of previous cases were civil and resolved with consent decrees and without fines or penalties."[23]

In January 1989, Bilzerian pleaded not guilty to the charges amid growing public controversy and demanded a speedy trial to clear his name. There were, broadly speaking, two different camps of opinion on Bilzerian's actions. Much of the public had a negative view of corporate takeovers in general and saw Bilzerian's activities as "greenmail", profiting by deceiving companies into believing they faced a hostile takeover attempt and scaring them into buying their stock from him at a high price. In Bilzerian's case he never sought greenmail and always offered all other shareholders all cash for their shares at prices substantially above the market.[23]

Many saw Bilzerian as guilty of nothing but making a profit in genuine-but-failed takeover attempts which benefited all investors.[4] In an article in New York magazine, Christopher Byron questioned the entire basis of the case against Bilzerian, describing it as fueled by "Puritan envy". He further stated that the Department of Justice's primary motivation for the case was not the prosecution of wrongdoing but rather the need to justify its earlier unpopular plea bargain with Boyd Jeffries of Jefferies & Company, which would see Jefferies avoid any jail time at all in exchange for the opportunity to "drag some headline-sized names through the mud".[24] Daniel Fischel, Dean of the University of Chicago Law School, argued Bilzerian was an innocent victim of an overzealous prosecutor, Rudy Guliani, and never should have been indicted as he was viewed as a hero to the shareholders of Cluett Peabody and Hammermill Paper Company.[25]

After two days of deliberations in June, the jury found Bilzerian guilty on nine counts including conspiracy, making false statements, and securities law violations.[26] In September, Judge Robert Joseph Ward sentenced Bilzerian to four years in prison and a fine of $1.5 million because he "now must pay the price" for testifying in his own defense. Bilzerian claims "Judge Ward had told me before trial that if I lost and did not testify I would receive no jail time, but if I lost and testified I would pay the price."[23] Bilzerian was permitted to remain free pending appeal.[27] Bilzerian's appeal came before the Court of Appeals for the Second Circuit, which in January 1991 ruled against him in a split decision, finding no merit in his argument that his trial had been unfair.[28] He started to serve his sentence in December 1991 at the now-closed Federal Prison Camp, Eglin at Eglin Air Force Base, Florida.[29] Bilzerian was released from prison in December 1992 to serve out his sentence under house arrest.[30] Bilzerian has maintained that the Court of Appeals for the Second Circuit should have reversed and vacated his conviction based on two subsequent unanimous United States Supreme Court decisions that mandated his conviction be reversed.[31] Instead, Bilzerian claims the Court of Appeals did not address the Supreme Court decisions and let his conviction stand.[23] After Bilzerian's release from prison, he became president of Utah-based software company Cimetrix.[32] In 2002, the government confiscated Bilzerian's ownership in Cimetrix and Bilzerian claims the government drove the company from several years of high sales growth and profitability to the verge of bankruptcy.[23]

Civil suit and bankruptcy[edit]

After Bilzerian was convicted, the SEC filed a civil suit against Bilzerian based on identical charges to force him to disgorge the profits from the takeover attempts.[33] Bilzerian claimed that this was double jeopardy as he had already been punished once for exactly the same conduct. In 1993, a federal judge ruled in favor of the SEC and ordered Bilzerian to disgorge $33.1 million of profits, plus interest.[34] The total amount to be disgorged was thus $62 million. In January 1994, Bilzerian also filed an appeal against the civil judgment in the Court of Appeals for the District of Columbia.[35] However, the court rejected his civil appeal as well.[36] The U.S. Supreme Court ruled in Kokesh v. SEC, 137 S. Ct. 1635, 1640 (2017), that disgorgement is a penalty which presumably would mean the Court of Appeals should have granted Bilzerian's appeal on Double Jeopardy grounds for being punished twice for the same crime. In June 2020, the Supreme Court ruled in Liu v. Securities and Exchange Commission (18–1501) that the Securities and Exchange Commission may seek and obtain disgorgement from a court as "equitable relief" for a securities law violation.[37]

Due to the size of the disgorgement judgment against him, Bilzerian first filed for bankruptcy in 1991. Bilzerian emerged from that bankruptcy having disgorged all his non-exempt assets in settlement of debts that mostly consisted of claims by the government.[38] In 1999, he tried to put his house up for sale in the prestigious Avila neighborhood of Tampa, Florida.[39][40] After the SEC continued its pursuit of Bilzerian, the judge issued an order appointing a receiver over his assets and ordered him arrested for civil contempt. Bilzerian then filed for bankruptcy again in January 2001, declaring his non-exempt assets of $15,805 against $140 million in debts, most of which was for the government's disgorgement judgment. Under Florida Bankruptcy Law, the value of his primary residence was protected from creditors. The SEC alleged that Bilzerian was using bankruptcy as a tactic to block creditors from finding out the true value of his assets, and Bilzerian argued that was a total fabrication as the bankruptcy laws require full disclosure and a trustee to take possession of his assets.[38] Bilzerian argued the real reason the SEC opposed his bankruptcy was so that the SEC Receiver could control all his assets through an extremely cooperative federal judge in Washington who allowed the SEC to go after Bilzerian's wife and children in conflict with an earlier bankruptcy court judgment.[23]

On June 11, 2001, while Bilzerian was in prison, FBI agents raided his family's residence on the strength of a sealed warrant and seized computers, files, and a Beretta firearm. The raid appeared to be related to SEC contentions that Bilzerian had concealed his ownership of assets during bankruptcy proceedings by transferring them to trusts and shell corporations, which Bilzerian claimed was a total fabrication.[41] Bilzerian unsuccessfully sued the FBI agent for filing a sworn affidavit that contained mostly false statements, but a federal judge dismissed the case. Bilzerian was released from prison in January 2002 pursuant to an agreement under which his wife, Terri Steffen would sell the residence and split the proceeds with the SEC, and transfer most of her wealth to the SEC. Bilzerian was critical of the deal, describing it as the SEC using him "as a hostage to extort money" from his wife.[42] In May 2004, Steffen sold her residence for $2.55 million to a partnership controlled by a Belgian businessman; SEC attorneys approved the unusually low price.[2] According to court documents filed in 2006, Steffen's parents purchased a 99% interest in that partnership three weeks later.[43]


  1. ^ "Who in the world lives there?". St. Petersburg Times. September 24, 1995. Retrieved January 6, 2013.
  2. ^ a b c Testerman, Jeff (September 4, 2005). "Tampa mansion at center of sprawling tax dispute". St. Petersburg Times. Retrieved November 9, 2012.
  3. ^ "Paul Bilzerian – Dan Bilzerian's (MY) father" (in Armenian). Dan Bilzerian on YouTube. April 27, 2014.
  4. ^ a b c d e f Reed, Ted (January 15, 1989). "Bilzerian Court Fight May Be A Long One". Chicago Tribune. Retrieved November 9, 2012.
  5. ^ a b c Cowan, Alison Leigh (May 24, 1987). "Corporate Raider: Paul Bilzerian; a scrappy takeover artist rises to the top". The New York Times. Retrieved November 10, 2012.
  6. ^ Kaplan, Michael (April 2010). "Laak and Esfandiari shoot guns". Poker Player Magazine. Archived from the original on August 28, 2012. Retrieved November 8, 2012.
  7. ^ Clenfield, Jason; Alpeyev, Pavel (June 15, 2014). "'Bitcoin Jesus' Calls Rich to Tax-Free Tropical Paradise". Bloomberg News. Retrieved July 10, 2014.
  8. ^ "Warning!". Saint Kitts and Nevis Citizenship by Investment Unit. June 24, 2014. Retrieved July 10, 2014.
  9. ^ a b Gellene, Denise (October 30, 1987). "Bilzerian Group May Try Takeover of Singer". Los Angeles Times. Retrieved November 9, 2012.
  10. ^ "Bilzerian ups offer for Cluett". The Sacramento Bee. October 16, 1985. Retrieved November 9, 2012.
  11. ^ "Bilzerian scores Cluett action as 'self-serving'". The Sacramento Bee. October 24, 1985. Retrieved November 9, 2012.
  12. ^ "Acquisition may mean diversification". The Robesonian. November 6, 1985. Retrieved November 9, 2012.
  13. ^ Crudele, John (July 25, 1986). "Hammerhill Gets Bid of $722 Million". The New York Times. Retrieved February 11, 2018.
  14. ^ Greiff, James (August 12, 1986). "Hammermill finds its 'white knight'". St. Petersburg Times. Retrieved November 9, 2012.
  15. ^ Cole, Robert J. (January 7, 1988). "Bilzerian's Singer Bid Aided by Pickens Loan". The New York Times. Retrieved November 9, 2012.
  16. ^ a b Cowan, Alison Leigh (August 24, 1988). "How Bilzerian Scored at Singer". The New York Times. Retrieved November 9, 2012.
  17. ^ Fischel, Daniel (1995). Payback: The Conspiracy to Destroy Michael Milkin and His Financial Revolution. New York: HarperCollins. pp. 42. ISBN 0-88730-757-4.
  18. ^ Payback at 81–82.
  19. ^ Payback at 94–97; 299–305.
  20. ^ a b Payback at 94–97.
  21. ^ "SEC Probe Checks Possible DeBartolo, Bilzerian Ties". Los Angeles Times. May 14, 1988. Retrieved November 9, 2012.
  22. ^ Richter, Paul (December 22, 1988). "Corporate Raider Bilzerian Charged With Stock Fraud". Los Angeles Times. Retrieved November 9, 2012.
  23. ^ a b c d e f Paul Bilzerian, St. Kitts interview, January 31, 2019
  24. ^ Byron, Christopher (June 12, 1989). "Trials of a bungling raider". New York. Retrieved November 9, 2012.
  25. ^ Fischel, Daniel (1995). Payback: The Conspiracy to Destroy Michael Milkin and His Financial Revolution. New York: HarperCollins. pp. 93–97, 304. ISBN 0-88730-757-4.
  26. ^ "Bilzerian Guilty On 9 Counts In Securities Case". Philadelphia Inquirer. June 10, 1989. Retrieved November 9, 2012.
  27. ^ Paltrow, Scot J. (September 28, 1989). "Bilzerian Gets $1.5-Million Fine, 4-Year Prison Term". Los Angeles Times. Retrieved November 9, 2012.
  28. ^ Haller, Vera (January 4, 1991). "Appeals Court Upholds Conviction of Corporate Raider Paul Bilzerian". Associated Press. Retrieved November 9, 2012.
  29. ^ Craddock, John (November 2, 1991). "A resigned Bilzerian prepares for prison". St. Petersburg Times.
  30. ^ "Raider must stay in home". The Prescott Courier. January 17, 1993. Retrieved November 9, 2012.
  31. ^;
  32. ^ Trigaux, Robert (March 15, 1999). "No time to rest for Paul Bilzerian". St. Petersburg Times. Retrieved November 9, 2012.
  33. ^ "SEC Plans To File Civil Suit Against Bilzerian". Associated Press. April 18, 1989. Retrieved November 9, 2012.
  34. ^ "Ex-corporate raider must pay restitution". Houston Chronicle. February 2, 1993. Retrieved November 9, 2012.
  35. ^ "Bilzerian appeals order to pay $62 million". Associated Press. January 14, 1994. Retrieved November 9, 2012.
  36. ^ "Bilzerian loses case". Boston Globe. July 23, 1994. Retrieved November 9, 2012.
  37. ^ "Liu v. Securities and Exchange Commission". SCOTUSblog. Retrieved July 10, 2020.
  38. ^ a b Barancik, Scott (January 5, 2001). "Ex-corporate raider files for bankruptcy". St. Petersburg Times. Retrieved November 9, 2012.
  39. ^ Trigaux, Robert (September 17, 2014). "Years after $62 million judgment, Paul Bilzerian is alive and well on Caribbean island". Retrieved August 17, 2017.
  40. ^ Duryea, Bill (February 19, 1999). "From one big house to another". St. Petersburg Times. Retrieved November 9, 2012.
  41. ^ Barancik, Scott (June 22, 2001). "FBI agents raid Bilzerian home". St. Petersburg Times. Retrieved November 8, 2012.
  42. ^ Barancik, Scott (February 5, 2002). "Truce". St. Petersburg Times. Retrieved November 9, 2012.
  43. ^ Coats, Bill (April 14, 2006). "Bilzerian mansion stays in family". Tampa Bay Times. Retrieved November 9, 2012.