Paul Bilzerian
Paul Bilzerian | |
---|---|
Born | 1950 (age 73–74) |
Nationality |
|
Alma mater | Stanford University Harvard Business School |
Occupation | Businessman |
Spouse |
Terri L. Steffen (m. 1978) |
Children | |
Awards | Bronze Star, Vietnamese Gallantry Cross, Army Commendation Medal |
Paul Alec Bilzerian (Armenian: Փօլ Պիլզերեան, born 1950) is an American businessman and corporate takeover specialist.[1]
Early life, education and family
Bilzerian was born in
However, after serving in the
Bilzerian has two sons, Adam and Dan Bilzerian. Both Adam and Dan went on to careers as professional poker players.[6]
In June 2014,
Career
One of Bilzerian's first business deals was an investment in the 1970s in a Tampa Bay-area radio station,
Corporate takeovers
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.[3] 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
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 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
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
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.
After two days of deliberations in June, the jury found Bilzerian guilty on nine counts including conspiracy, making false statements, and securities law violations.
Civil suit
After Bilzerian was convicted, the SEC filed a civil suit against Bilzerian based on identical charges to force him to
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.
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.[42] 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.[43] 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.[5] According to court documents filed in 2006, Steffen's parents purchased a 99% interest in that partnership three weeks later.[44]
References
- ^ "Who in the world lives there?". St. Petersburg Times. September 24, 1995. Retrieved January 6, 2013.
- ^ "Paul Bilzerian – Dan Bilzerian's (MY) father" (in Armenian). Dan Bilzerian on YouTube. April 27, 2014.
- ^ 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.
- ^ 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.
- ^ a b Testerman, Jeff (September 4, 2005). "Tampa mansion at center of sprawling tax dispute". St. Petersburg Times. Archived from the original on January 5, 2016. Retrieved August 27, 2023.
- ^ Kaplan, Michael (April 2010). "Laak and Esfandiari shoot guns". Poker Player Magazine. Archived from the original on August 28, 2012. Retrieved November 8, 2012.
- ^ Clenfield, Jason; Alpeyev, Pavel (June 15, 2014). "'Bitcoin Jesus' Calls Rich to Tax-Free Tropical Paradise". Bloomberg News. Retrieved July 10, 2014.
- ^ "Warning!". Saint Kitts and Nevis Citizenship by Investment Unit. June 24, 2014. Retrieved July 10, 2014.
- ^ a b Gellene, Denise (October 30, 1987). "Bilzerian Group May Try Takeover of Singer". Los Angeles Times. Retrieved November 9, 2012.
- ^ "Bilzerian ups offer for Cluett". The Sacramento Bee. October 16, 1985. Retrieved November 9, 2012.
- ^ "Bilzerian scores Cluett action as 'self-serving'". The Sacramento Bee. October 24, 1985. Retrieved November 9, 2012.
- ^ "Acquisition may mean diversification". The Robesonian. November 6, 1985. Retrieved November 9, 2012.
- ^ Crudele, John (July 25, 1986). "Hammerhill Gets Bid of $722 Million". The New York Times. Retrieved February 11, 2018.
- ^ Greiff, James (August 12, 1986). "Hammermill finds its 'white knight'". St. Petersburg Times. Retrieved November 9, 2012.
- ^ Cole, Robert J. (January 7, 1988). "Bilzerian's Singer Bid Aided by Pickens Loan". The New York Times. Retrieved November 9, 2012.
- ^ a b Cowan, Alison Leigh (August 24, 1988). "How Bilzerian Scored at Singer". The New York Times. Retrieved November 9, 2012.
- ISBN 0-88730-757-4.
- ^ Payback at 81–82.
- ^ Payback at 94–97; 299–305.
- ^ a b Payback at 94–97.
- ^ "SEC Probe Checks Possible DeBartolo, Bilzerian Ties". Los Angeles Times. May 14, 1988. Retrieved November 9, 2012.
- ^ Richter, Paul (December 22, 1988). "Corporate Raider Bilzerian Charged With Stock Fraud". Los Angeles Times. Retrieved November 9, 2012.
- ^ a b c d e f Paul Bilzerian, St. Kitts interview, January 31, 2019
- ^ Byron, Christopher (June 12, 1989). "Trials of a bungling raider". New York. Retrieved November 9, 2012.
- ISBN 0-88730-757-4.
- ^ "Bilzerian Guilty On 9 Counts In Securities Case". Philadelphia Inquirer. June 10, 1989. Retrieved November 9, 2012.
- ^ Paltrow, Scot J. (September 28, 1989). "Bilzerian Gets $1.5-Million Fine, 4-Year Prison Term". Los Angeles Times. Retrieved November 9, 2012.
- ^ Haller, Vera (January 4, 1991). "Appeals Court Upholds Conviction of Corporate Raider Paul Bilzerian". Associated Press News. Retrieved November 9, 2012.
- ^ Craddock, John (November 2, 1991). "A resigned Bilzerian prepares for prison". St. Petersburg Times.
- ^ "Raider must stay in home". The Prescott Courier. January 17, 1993. Retrieved November 9, 2012.
- ^ "UNITED STATES v. GAUDIN certiorari to the united states court of appeals for the ninth circuit" (PDF). Retrieved October 18, 2022.
- ^ "JOHN SULLIVAN, PETITIONER v. LOUISIANA". Retrieved October 18, 2022.
- ^ Trigaux, Robert (March 15, 1999). "No time to rest for Paul Bilzerian". St. Petersburg Times. Retrieved November 9, 2012.
- ^ "SEC Plans To File Civil Suit Against Bilzerian". Associated Press News. April 18, 1989. Retrieved November 9, 2012.
- ^ "Ex-corporate raider must pay restitution". Houston Chronicle. February 2, 1993. Retrieved November 9, 2012.
- ^ "Bilzerian appeals order to pay $62 million". Associated Press. January 14, 1994. Retrieved November 9, 2012.
- ^ "Bilzerian loses case". Boston Globe. July 23, 1994. Retrieved November 9, 2012.
- ^ "Liu v. Securities and Exchange Commission". SCOTUSblog. Retrieved July 10, 2020.
- ^ a b Barancik, Scott (January 5, 2001). "Ex-corporate raider files for bankruptcy". St. Petersburg Times. Retrieved November 9, 2012.
- ^ Trigaux, Robert (September 17, 2014). "Years after $62 million judgment, Paul Bilzerian is alive and well on Caribbean island". TampaBay.com. Retrieved August 17, 2017.
- ^ Duryea, Bill (February 19, 1999). "From one big house to another". St. Petersburg Times. Retrieved November 9, 2012.
- ^ Barancik, Scott (June 22, 2001). "FBI agents raid Bilzerian home". St. Petersburg Times. Retrieved November 8, 2012.
- ^ Barancik, Scott (February 5, 2002). "Truce". St. Petersburg Times. Retrieved November 9, 2012.
- ^ Coats, Bill (April 14, 2006). "Bilzerian mansion stays in family". Tampa Bay Times. Retrieved November 9, 2012.