VPX Liquidating Trust v. Owoc et al

0:24-ap-01009Flsb24 mars 2026

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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF FLORIDA
FORT LAUDERDALE DIVISION
In re: 	Chapter 11 Case
VITAL PHARMACEUTICALS, INC., et al., 	Case No. 22-17842-PDR
Debtors.
________________________________________/
VPX LIQUIDATING TRUST,
Plaintiff, 	Adv. Pro. No. 24-01009-PDR
v.
JOHN H. OWOC, et al.,
Defendants.
________________________________________/
Peter D. Russin, Judge
United States Bankruptcy Court
_____________________________________________________________________________
ORDERED in the Southern District of Florida on March 23, 2026.
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ORDER GRANTING LIQUIDATING TRUST’S MOTION FOR PARTIAL
SUMMARY JUDGMENT ON COUNT THREE AND DENYING
DEFENDANT’S CROSS-MOTION FOR SUMMARY JUDGMENT
Corporate officers who breach their fiduciary duties do not become immune
from accountability simply because they are also the only stockholders. Florida law
imposes fiduciary obligations on directors and officers for the protection of the
corporation itself—not for the benefit of any particular class of shareholders, and not
subject to waiver by a sole owner who later finds it convenient to argue that no one
was harmed but himself. When those obligations are breached and the corporation is
driven into bankruptcy, the right to enforce them passes to the trustee or liquidating
trust.
The question before the Court is whether John H. Owoc—VPX’s founder, sole
shareholder, sole director, and CEO—breached his fiduciary duties to the corporation
by orchestrating a false advertising campaign that a federal jury found to be willful
and deliberate, resulting in a judgment approaching $300 million. The Liquidating
Trust argues that he did and moves for partial summary judgment on Count Three
of its Second Amended Complaint.1 Mr. Owoc opposes and raises a Cross-Motion for
Summary Judgment embedded in his Response.2 For the reasons that follow, the
Liquidating Trust’s Motion is granted, and Mr. Owoc’s Cross-Motion is denied.
I. Background
1Dkt. No. 364.
2Dkt. No. 384.
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Mr. Owoc founded Vital Pharmaceuticals, Inc. (“VPX”) in 1993, serving as its
sole officer and shareholder.3 Under his leadership, VPX experienced significant
growth and commercial success with its Bang energy drink brand.4 At its peak, the
company generated over $1 billion in annual revenue—an extraordinary achievement
by any measure.5
However, central to Bang’s commercial success were marketing claims about a
proprietary ingredient Mr. Owoc called “Super Creatine.” VPX marketed Super
Creatine as a superior form of creatine that provided significant physical and mental
health benefits.6 Those claims, as a federal jury would later find, were false.7 The
Complaint in this adversary proceeding refers to the false advertising as the “Super
Creatine Scheme.”8
It is undisputed—and the Defendant has expressly acknowledged in his
briefing and sworn declaration—that Mr. Owoc was VPX’s sole shareholder, sole
3Declaration of John H. Owoc (Dkt. No. 384) at ¶¶ 2–3.
4 Declaration of John DiDonato in Support of Chapter 11 Petitions and First Day Motions
(Main Case Dkt. No. 26) at ¶¶ 8-9. Mr. Owoc included Mr. DiDonato’s Declaration as Exhibit C to
Defendant’s Response in Opposition and Cross-Motion for Summary Judgment (Dkt. No. 384) (the
“Response”). The Court may take judicial notice of Mr. DiDonato’s Declaration under Federal Rule of
Evidence 201. Rule 201(c)(1) provides that the Court may take judicial notice on its own, and the
Eleventh Circuit has provided that courts may take judicial notice of their own records. United
States v. Rey, 811 F.2d 1453, 1457 n.5 (11th Cir. 1987).
5Declaration of John DiDonato in Support of Chapter 11 Petitions and First Day Motions
(Main Case Dkt. No. 26) at ¶ 9.
6Monster Energy Co. v. Vital Pharms., Inc., No. 23-55451 (9th Cir. Apr. 15, 2025) (mem.), at
2.
7Jury Verdict Form, Monster Energy Co. v. Vital Pharms., Inc., No. 5:18-cv-01882-JGB-SHK
(C.D. Cal.).
8Second Amended Complaint (Dkt. No. 148) at ¶13.
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director, and Chief Executive Officer at all times relevant to the allegations in Count
Three.9 Defendant’s own papers state that VPX had “no corporate will separate from
Mr. Owoc’s own.”10 There were no minority shareholders, no independent directors,
and no board other than Mr. Owoc himself.11
In 2018, Monster Energy Company filed suit against both VPX and Mr. Owoc
individually in the United States District Court for the Central District of California,
alleging that the Super Creatine advertising violated Section 43(a) of the Lanham
Act (the “Monster False Advertising Litigation”).12 Following a seven-week jury trial,
the jury: (1) found both VPX and Mr. Owoc liable for false advertising; (2) found that
their false advertising was willful and deliberate; and (3) awarded $271,924,174 in
damages.13 	Monster 	was 	additionally 	awarded 	approximately 	$21 	million 	in
attorneys’ fees and over $6 million in costs.14 The total judgment—which the Court
will refer to as the “False Advertising Judgment”—approached $300 million.
The jury was instructed that “VPX and/or Mr. Owoc acted willfully if they knew
that their advertising was false or misleading or if they acted with indifference to
9Declaration of John H. Owoc at ¶¶ 2–3.
10Response at 24. Representations in a party’s brief qualify as judicial admissions that can be
used against them for purposes of summary judgment. American Title Ins. Co. v. Lacelaw Corp., 861
F.2d 224, 226 (9th Cir. 1988).
11Defendants' Statement of Disputed Material Facts (Dkt. No. 387) ¶¶ 1–2.
12Monster Energy Co. v. Vital Pharms., Inc., No. 5:18-cv-01882-JGB-SHK (C.D. Cal.).
13Jury Verdict Form, Monster Energy Co. v. Vital Pharms., Inc., No. 5:18-cv-01882-JGB-SHK
(C.D. Cal.).
14Monster Energy Co. v. Vital Pharms., Inc., No. 5:18-cv-01882-JGB-SHK (C.D. Cal.), Order
Denying Motion for New Trial (Dkt. No. 1040), at 31, 33.
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whether their advertising was false or misleading.”15 This instruction is significant.
The jury's willfulness finding necessarily encompassed a determination that Mr.
Owoc either knew that the advertising was false or acted with indifference to whether
it was.
The district court denied Defendants’ post-trial motions, confirming that the
jury “necessarily found that Defendants’ advertising of Super Creatine (1) is false or
misleading; (2) deceives or is likely to deceive consumers; (3) is material to consumers’
purchasing decisions; and (4) injured Monster.”16 Mr. Owoc appealed. The Ninth
Circuit affirmed, describing the “key issue at trial” as “whether Monster had shown
that 	Owoc’s 	advertisement 	of 	BANG 	as 	containing 	Super 	Creatine 	was 	false
advertising under the Lanham Act.”17
The False Advertising Judgment was one of the principal reasons for VPX’s
bankruptcy filing on October 10, 2022.18 Ultimately, a Chapter 11 plan of liquidation
was confirmed and became effective on November 21, 2023, establishing the VPX
Liquidating Trust,19 which is the Plaintiff in this adversary proceeding. The Trust
filed its Motion for Partial Summary Judgment on December 23, 2025, seeking a
15Jury Instructions, Monster Energy Co. v. Vital Pharms., Inc., No. 5:18-cv-01882-JGB-SHK
(C.D. Cal.), Trial Tr. 28:23–29:5.
16Monster Energy Co. v. Vital Pharms., Inc., No. 5:18-cv-01882-JGB-SHK (C.D. Cal.), Order
Denying Motion for New Trial (Dkt. No. 1040), at 18.
17Monster Energy Co. v. Vital Pharms., Inc., No. 23-55451 (9th Cir. Apr. 15, 2025) (mem.), at
5.
18Declaration of John DiDonato in Support of Chapter 11 Petitions and First Day Motions
(Main Case Dkt. No. 26) at ¶ 41.
19Second Amended Joint Plan of Liquidation (Main Case Dkt. No. 1905).
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determination of liability on Count Three—breach of fiduciary duty arising from the
Super Creatine Scheme.
II. Jurisdiction
This Court has subject matter jurisdiction over this adversary proceeding
pursuant to 28 U.S.C. §§ 1334 and 157. Section 1334(b) confers jurisdiction over “all
civil proceedings arising under title 11, or arising in or related to cases under title
11.”20 A proceeding is ‘related to’ a bankruptcy case if “the outcome of that proceeding
could conceivably have any effect on the estate being administered in bankruptcy.”21
This adversary proceeding satisfies that standard. The Liquidating Trust's claims, if
successful, would augment the estate's assets available for distribution to creditors—
a direct and substantial effect on the administration of the estate.
Although there is a reasonable basis to treat the Liquidating Trust's breach of
fiduciary duty claims as core proceedings under 28 U.S.C. § 157(b)(2)(A) and (O), the
Court need not resolve that question. Because the claims arise under Florida state
law and exist independent of the Bankruptcy Code, Stern v. Marshall may raise a
constitutional barrier to entry of final judgment regardless of statutory core status.22
The Court therefore treats the proceeding as non-core under § 157(c). The question of
finality is resolved by the parties' consent under § 157(c)(2), which, as the Supreme
Court confirmed in Wellness International Network, Ltd. v. Sharif, satisfies Article
2028 U.S.C. § 1334(b).
21Miller v. Kemira, Inc. (In re Lemco Gypsum, Inc.), 910 F.2d 784, 788 (11th Cir. 1990).
22Stern v. Marshall, 564 U.S. 462, 502 (2011).
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III and authorizes this Court to enter final judgment.23 Under § 157(c)(2), a
bankruptcy court may enter a final order in such a proceeding with the consent of all
parties.24 Here, the parties have consented,25 and the Court thus has authority to
enter final judgments in this proceeding.
III. Legal Standard
Summary judgment is governed by Federal Rule of Civil Procedure 56(a),
which provides that the Court “shall grant summary judgment if the movant shows
that there is no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.”26 The movant bears the initial burden of demonstrating
23Wellness International Network, Ltd. v. Sharif, 575 U.S. 665, 685 (2015).
2428 U.S.C. § 157(c)(2).
25 The parties consented by virtue of this Court’s Order Setting Scheduling Conference and
Establishing Procedures and Deadlines (Dkt. No. 3) (the “Scheduling Order”), which provides:
“OBJECTION TO ENTRY OF FINAL ORDERS AND JUDGMENTS BY THE BANKRUPTCY
COURT; CONSENT. Unless otherwise ordered by the Court, not later than 4:00 p.m. two
business days before the scheduling conference, each party objecting to the entry of final orders or
judgments by this Court on any issue in this proceeding must file with this Court a motion pursuant
to Rule 7016(b), Fed. R. Bankr. P., requesting that this Court determine whether this proceeding is
subject to the entry of final orders or judgments by this Court. Any such motion will be treated as an
objection to the entry of final orders or judgments by this Court. FAILURE OF ANY PARTY TO
FILE A MOTION ON OR BEFORE THE DEADLINE PROVIDED IN THIS PARAGRAPH
CONSTITUTES CONSENT BY SUCH PARTY TO THIS COURT ENTERING ALL
APPROPRIATE FINAL ORDERS AND JUDGMENTS IN THIS PROCEEDING.” The
scheduling conference was continued multiple times ultimately held on November 13, 2024 (See Dkt.
No. 114). Accordingly, the parties had until November 11, 2024, to object to this Court entering final
orders. Neither party objected by that date, which constitutes consent under the Scheduling Order.
Mr. Owoc also moved to withdraw the reference to the District Court on February 14, 2025
(Amended Motion for Withdrawal of Reference, Dkt. No. 232), and that motion was transmitted to
the District Court on March 13, 2025, commencing Civil Action Number: 0:25-cv-60486-MD (Dkt.
Nos. 248, 249). However, the request to withdraw the reference was likewise untimely under this
Court’s Scheduling Order. As of now, the Amended Motion for Withdrawal of Reference is still
pending before the District Court. The timeliness and effect of that motion, however, are matters for
the District Court to resolve. This Court proceeds on the basis that the parties' consent, as
established by the Scheduling Order, authorizes entry of final judgment.
26Fed. R. Civ. P. 56(a), made applicable by way of Fed. R. Bankr. P. 7056.
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the absence of a genuine issue of material fact.27 Once met, the non-movant must
come forward with specific facts showing a genuine issue for trial; a mere scintilla of
evidence is insufficient.28 The Court views the evidence in the light most favorable to
the non-moving party.29
IV. Analysis
Under Florida law, a claim for breach of fiduciary duty requires three elements:
(1) the existence of a fiduciary duty; (2) a breach of that duty; and (3) damages
proximately caused by the breach.30 The Court addresses each in turn.
A. Collateral Estoppel Establishes the Factual Predicate
Before reaching the elements, the Court addresses the threshold question of
collateral estoppel. The Liquidating Trust contends that the jury’s findings in the
Monster False Advertising Litigation preclude Mr. Owoc from relitigating whether
he willfully and deliberately engaged in false advertising of Super Creatine. The
Court agrees.
As an initial matter, the Liquidating Trust has moved for the Court to take
judicial notice of the First Amended Complaint in the Monster False Advertising
Litigation,31 the jury verdict form in that case,32 the District Court’s order denying
27Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
28Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986).
29Tolan v. Cotton, 572 U.S. 650, 657 (2014).
30Gracey v. Eaker, 837 So. 2d 348, 353 (Fla. 2002); Taubenfeld v. Lasko, 324 So. 3d 529, 537–
38 (Fla. 4th DCA 2021).
31Monster Energy Company v. Vital Pharmaceuticals, Inc., First Amended Complaint (Dkt.
No. 61), Case No. 19-1882-JGB (C.D. Cal.)
32Id., Verdict Form (Dkt. No. 890).
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Mr. Owoc’s post-trial motions,33 and the Ninth Circuit’s affirmance of the jury verdict
and District Court’s ruling,34 all of which were attached as exhibits to the Liquidating
Trust’s Motion For Partial Summary Judgment on Count Three. The Court grants
that request.
Under Federal Rule of Evidence 201, the Court may take judicial notice of a
fact that “(1) is generally known within the trial court’s territorial jurisdiction; or (2)
can be accurately and readily determined from sources whose accuracy cannot
reasonably be questioned.”35 Courts routinely take judicial notice for the Liquidating
Trust’s precise purpose—bringing court records from prior litigation into evidence
when considering dispositive motions, finding such records capable of determination
from sources that cannot be reasonably questioned.36
The Court notes that, with regard to Monster’s First Amended Complaint, the
Court does not accept the allegations therein for the truth of the matters asserted.
Rather, the Complaint simply provides the Court context for that litigation. On the
other hand, the Court must credit the findings from the jury verdict, District Court,
and Ninth Circuit, as the Court will now explain.
33Id., Order (1) DENYING Defendants’ Motion for New Trial, Judgment Notwithstanding the
Verdict, or Remittitur (Dkt. No. 921); (2) GRANTING IN-PART Plaintiff’s Motion for Equitable
Relief, Fees, and Costs (Dkt. No. 928); (3) DENYING Defendant’s Request for Clarification (Dkt. No.
1035); and (4) DENYING Defendant’s Application to File Supplemental Opposition Under Seal (Dkt.
No. 1038) (Dkt. No. 1050).
34Monster Energy Company v. Vital Pharmaceuticals, Inc., Nos. 23-055451 and 24-244 (9th
Cir.) (April 15, 2025 Memorandum).
35Fed. R. Evid. 201(b).
36Horne v. Potter, 392 F. App'x 800, 802 (11th Cir. 2010).
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In the Eleventh Circuit, collateral estoppel applies when: (1) the issue is
identical to one previously litigated; (2) the issue was actually litigated; (3) the
determination was critical and necessary to the earlier judgment; and (4) the
estopped party had a full and fair opportunity to litigate.37 The doctrine may be used
offensively to preclude a party from relitigating issues previously determined against
it.38
Each element is satisfied here. The factual predicate of Count Three—that Mr.
Owoc willfully and deliberately engaged in false advertising of Super Creatine—is
identical to the central issue in the Monster False Advertising Litigation. The issue
was not resolved by default or stipulation; it was the product of a seven-week jury
trial. The findings were critical and necessary to the Lanham Act verdict—the district
court 	confirmed 	the 	jury 	“necessarily 	found” 	that 	the 	advertising 	was 	false,
misleading, material, and injurious,39 and the Ninth Circuit described it as “the key
issue at trial.”40 Mr. Owoc had every opportunity to litigate the point. He was a named
defendant, was represented by counsel, and defended through trial and two levels of
appellate review.
37In re MDL-1824 Tri-State Water Rts. Litig., 644 F.3d 1160, 1202 (11th Cir. 2011).
38Parklane Hosiery Co. v. Shore, 439 U.S. 322, 337 (1979).
39Monster Energy Co. v. Vital Pharms., Inc., No. 5:18-cv-01882-JGB-SHK (C.D. Cal.), Order
Denying Motion for New Trial (Dkt. No. 1040), at 18.
40Monster Energy Co. v. Vital Pharms., Inc., No. 23-55451 (9th Cir.) (Apr. 15, 2025
Memorandum), at 5.
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Accordingly, Mr. Owoc is collaterally estopped from relitigating the findings of
the False Advertising Judgment, and those findings are established for purposes of
this proceeding.
B. Element One: Duty
The first element is straightforward. Under the Florida Business Corporations
Act, directors must discharge their duties “in good faith” and “with the care an
ordinarily 	prudent 	person 	in 	a 	like 	position 	would 	exercise 	under 	similar
circumstances.”41 Officers are subject to the same obligations.42 It is undisputed that
Mr. Owoc was VPX’s sole director and CEO throughout the relevant period. He owed
VPX fiduciary duties of care, loyalty, and good faith by virtue of those positions. The
duty element is established as a matter of law.
C. Element Two: Breach
The applicable standard for breach of the duty of care under Florida law is
gross negligence, which has been described as “synonymous with engaging in an
irrational decision making process.”43 As articulated by the District Court for the
Southern District of Florida in In re Tousa, corporate strategy fails the standard of
care when it reflects “a knowing and deliberate indifference to the potential risk of
harm to the Company.”44
41Fla. Stat. § 607.0830(1).
42Fla. Stat. § 607.08411(1)–(2); Taubenfeld, 324 So. 3d at 538.
43In re TOUSA, Inc., 437 B.R. 447, 462 (S.D. Fla. 2010).
44Id.
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The jury in the Monster False Advertising Litigation found that Mr. Owoc’s
false advertising was “willful and deliberate.” Pursuant to the jury instructions, that
means the jury found he knew that the advertising was false or misleading or acted
with indifference to whether the advertising was false or misleading.45 The Court is
mindful that Mr. Owoc maintains, with evident conviction, that Super Creatine is a
legitimate compound. But a federal jury heard seven weeks of evidence and concluded
otherwise, finding that Mr. Owoc knew that Super Creatine was not a legitimate
compound or acted with indifference to that fact.46 Those findings are preclusive, and
this Court is bound by them. The avenue for challenging the jury’s conclusion was the
appellate process in the Monster case—not relitigation here. Mr. Owoc pursued such
an appeal and lost.
A 	director 	who 	causes 	the 	corporation 	to 	engage 	in 	a 	years-long 	false
advertising campaign that he knew was false, or acted with indifference to whether
it was false, is the precise “knowing and deliberate indifference to the potential risk
of harm to the Company” that the Tousa court held breaches the fiduciary duty of
care.
D. Element Three: Damages
The damages here arise from the False Advertising Judgment approaching
$300 million. The causal chain requires no inference: Mr. Owoc directed the false
45Jury Instructions, Monster Energy Co. v. Vital Pharms., Inc., No. 5:18-cv-01882-JGB-SHK
(C.D. Cal.), Trial Tr. 28:23–29:5.
46Jury Verdict Form, Monster Energy Co. v. Vital Pharms., Inc., No. 5:18-cv-01882-JGB-SHK
(C.D. Cal.).
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advertising, Monster sued, a jury found the advertising willfully and deliberately
false, and VPX was held jointly and severally liable for $271.9 million in damages,
plus fees and costs. VPX would not have been saddled with such judgment but for Mr.
Owoc’s conduct. Accordingly, the damages element is met, as are the other two
elements, and the Court holds that Mr. Owoc breached his fiduciary duties to VPX
via his conduct resulting in the False Advertising Judgment.
Because the Liquidating Trust seeks only a determination of liability at this
time, the precise quantification of damages is reserved for further proceedings. For
now, it suffices to say that the third element of breach of fiduciary duty is met, and
Mr. Owoc is thus liable for his breach.
V. Defendant’s Arguments
The Court now turns to Defendant’s arguments in opposition. Mr. Owoc raises
a broad array of defenses, some procedural, some equitable, some substantive. The
Court has considered each of them carefully. None creates a genuine dispute of
material fact or otherwise bars summary judgment.
A. Arguments Against Collateral Estoppel
1. Evidentiary Objection
Defendant argues that the Trust’s Statements of Undisputed Facts improperly
rely on allegations from Monster’s complaint. The objection is misplaced. The Trust
does not rely on Monster’s complaint as evidence of truth. It relies on the jury verdict,
the district court’s post-trial orders, and the Ninth Circuit’s memorandum—final
judicial determinations, not allegations. The Monster complaint provides context for
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what was at issue, nothing more. The preclusive findings come from the verdict and
its affirmance.
2. Pending Certiorari
Defendant argues that the False Advertising Judgment lacks preclusive effect
because a petition for certiorari is pending before the United States Supreme Court.
That is not the law. As the Eleventh Circuit has made clear, “[t]he established rule
in 	the 	federal 	courts 	is 	that 	a 	final 	judgment 	retains 	all 	of 	its 	res 	judicata
consequences pending decision of the appeal.”47 The Monster judgment has been
entered by the district court, post-trial motions have been denied, and the Ninth
Circuit has affirmed. The Supreme Court has not granted certiorari. And even if
certiorari were granted and review were underway, the judgment would nevertheless
retain its preclusive effect. If the Supreme Court were to vacate the underlying
judgment, this Court could revisit the issue at that time.
3. Collateral Estoppel “Symmetry”
Defendant argues that the Trust applies collateral estoppel asymmetrically
invoking findings against Mr. Owoc while ignoring VPX’s co-liability. This argument
misapprehends the Trust’s theory of the case. The Trust does not deny VPX’s liability;
to the contrary, it relies on it. The damages arose precisely from VPX’s liability
approaching $300 million caused by Mr. Owoc’s breach—VPX’s co-liability supplies
the third element of the claim. There is no asymmetry. The cases Defendant cites
47Jaffree v. Wallace, 837 F.2d 1461, 1467 (11th Cir. 1988).
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articulate the standard elements of collateral estoppel, all of which are satisfied
here.48
B. Arguments Against Standing
Defendant invokes several related arguments purporting to defeat the Trust’s
standing: derivative standing limitations, in pari delicto, unclean hands, and abuse
of process. Defendant characterizes these as standing challenges; the Court addresses
them as affirmative defenses. Each fails.
1. Derivative Standing
Defendant argues the Trust lacks standing because, under 11 U.S.C. §
541(a)(1), it acquires no greater rights than VPX possessed. The premise is correct,
but the conclusion does not follow.
VPX always had a cause of action for breach of fiduciary duty against its sole
director. The fact that VPX would not have brought such a claim—because the
wrongdoer controlled the entity—does not mean the claim did not exist. It means only
that there was no one positioned to enforce it. That is precisely the situation that the
establishment of a liquidating trust is designed to address. As the Supreme Court has
recognized, fiduciary obligations are normally enforceable by the corporation directly,
but “in the event of bankruptcy of the corporation,” they become “enforceable by the
trustee,” because “that standard of fiduciary obligation is designed for the protection
48Allen v. McCurry, 449 U.S. 90 (1980); Montana v. United States, 440 U.S. 147 (1979).
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of 	the 	entire 	community 	of 	interests 	in 	the 	corporation—creditors 	as 	well 	as
stockholders.”49
The Liquidating Trust serves as the independent voice that the corporation
lacked while the wrongdoer was in control. It may bring the claim that VPX had
against Mr. Owoc.
2. In Pari Delicto
Mr. Owoc next argues that the doctrine of in pari delicto bars the Trust’s
claims. That defense fails for a number of reasons.
a. What the Doctrine Means and Where It Comes From
The Latin phrase in pari delicto means, simply, “in equal fault.” 	The full
maxim from which it derives—in pari delicto potior est conditio defendantis—
translates roughly as: where both parties are equally in the wrong, the position of the
defendant is the stronger one.50
To understand what that means in practice, start with a simple example.
Suppose two people agree to run an illegal gambling operation together. The venture
collapses. One of them sues the other for his share of the money. What should a court
do?
The doctrine of in pari delicto supplies the answer: nothing. The court declines
to intervene. Not because it likes the defendant, but because it will not lend its
resources to settling a dispute between two people who were equally responsible for
49Pepper v. Litton, 308 U.S. 295, 307 (1939).
50Bateman Eichler, Hill Richards, Inc. v. Berner, 472 U.S. 299, 306 (1985).
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creating the problem in the first place. As the Supreme Court explained, the doctrine
rests on two foundational principles. 	First, courts should not serve as referees
between wrongdoers—they have better things to do than sort out the relative
grievances of parties who were both misbehaving. 	Second, denying relief to a
wrongdoer is itself a form of deterrence—if you cannot run to court when your illegal
scheme goes sideways, you have one more reason not to start the scheme.51
The doctrine is old. Its roots reach back centuries into English common law
and before that into Roman law, and it has been recognized in American courts since
the earliest days of the republic. It is an equitable doctrine, meaning it originated not
in rigid statutory rules but in courts of conscience. These courts asked not merely
what the law technically required, but what justice demanded. That equitable origin
means the doctrine was never meant to be applied mechanically. 	Courts of equity
have always recognized that blanket rules can produce unjust results in particular
cases, and they have developed exceptions accordingly.
b. What the Doctrine Is Not Designed to Do
Understanding what in pari delicto was designed to do requires understanding
what it was not designed to do. It is not a reward for defendants. It is not a general
license for wrongdoers to escape accountability. And it is not a tool for the powerful
to insulate themselves from the consequences of their own misconduct.
The doctrine was designed for a specific and limited situation: two parties who
were both independently at fault, who voluntarily engaged in the same wrongdoing,
51Id.
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dispute their relative entitlements arising from that shared wrongdoing. 	In that
situation, a court steps back and says: we will not sort this out. 	The parties made
their choices; they can live with the consequences.
When the situation does not fit that description—when the parties were not
independently at fault, when the plaintiff was not a voluntary wrongdoer, or when
the very nature of the claim is that the defendant wronged the plaintiff rather than
that both wronged each other—the doctrine has no application. 	As one court aptly
cautioned, courts should not be “so enamored with the Latin phrase ‘in pari delicto’
that they blindly extend the rule to every case where illegality appears somewhere in
the transaction.”52
c. How the Doctrine Works in Corporate Cases
When a corporation—or someone acting on its behalf, like a bankruptcy trustee
or a liquidating trust—sues a third party, and that third party invokes in pari delicto,
the defense works through the law of agency and imputation. A corporation cannot
act on its own; it can only act through human beings—its officers, directors, and
employees. Under basic agency principles, what those people do within the scope of
their authority is attributed, or “imputed,” to the corporation. 	So, if a corporation’s
officers committed fraud that harmed a third party, and the third party later sues
the corporation, the corporation cannot deny that the fraud was its own—the officers
were its agents, and their acts were its acts.
52Norwood v. Judd, 93 Cal. App. 2d 276, 289 (1949).
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That imputation principle has real consequences for in pari delicto. 	If a
corporation’s officers participated in wrongdoing, that wrongdoing is imputed to the
corporation. 	A trustee who later steps into the corporation’s shoes is bound by the
same history. 	Courts have held that the trustee cannot sue others for their role in
the wrongdoing if the corporation itself was an equal participant.53
But imputation—the rule that attributes an agent’s acts to a principal—has
its own limits. The most important limit is the adverse interest exception: an agent’s
misconduct is not imputed to the principal if the agent was acting entirely in his own
interest 	and 	adversely 	to 	the 	interest 	of 	the 	corporation.54 	The 	logic 	is
straightforward: imputation is based on the idea that the agent and principal are, in
a relevant sense, one—the agent is working for the principal, carrying out the
principal’s purposes. When an agent abandons the principal’s interests entirely and
acts only for himself, that unity breaks down. The corporation is not complicit; it is a
victim.
d. The Defense as Applied Here
i. Waiver
As an affirmative defense, in pari delicto must be pled in a responsive
pleading.55 	The Eleventh Circuit is clear that failure to plead an affirmative defense
53Official Committee of Unsecured Creditors v. R.F. Lafferty & Co., 267 F.3d 340, 354 (3d Cir.
2001).
54In re CBI Holding Co., 529 F.3d 432, 448 (2d Cir. 2008).
55Fed. R. Civ. P. 8(c), incorporated by Fed. R. Bankr. P. 7008.
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in the answer results in waiver.56 This Court has applied that rule to this precise
defense.57 Mr. Owoc did not plead in pari delicto in his answer and affirmative
defenses. He raises it for the first time in opposition to summary judgment—a stage
at which new affirmative defenses cannot be introduced.58 The defense is waived.
That conclusion alone is dispositive.
ii. The Doctrine Does Not Fit This Claim
Even if the defense had been properly preserved, it would fail because the
doctrine does not apply to a claim of this kind. Recall the doctrine’s premise: two
parties, independently and voluntarily at fault, dispute their relative grievances
arising from shared wrongdoing. That premise requires two parties with genuinely
independent culpability. 	It requires that the plaintiff made its own autonomous
choice to participate in the conduct at issue. 	Without that independence—without
two separate actors, each exercising its own will in the same wrongdoing—there are
not two wrongdoers. There is one wrongdoer, and someone that wrongdoer harmed.
Here, the record establishes that VPX had, in Mr. Owoc’s own words, “no
corporate will separate from Mr. Owoc’s own.”59 He was the sole shareholder, sole
director, and chief executive officer of VPX for the entirety of the relevant period.60
56Seaberg v. Steak N’ Shake Operations, Inc., 697 F. App’x 941, 943 (11th Cir. 2017).
57In re No Rust Rebar, Inc., No. 23-01087, 2025 WL 1571065, at *5 n.40 (Bankr. S.D. Fla. June
3, 2025).
58See Gilmour v. Gates, McDonald & Co., 382 F.3d 1312, 1315 (11th Cir. 2004).
59Response at 24. Representations in a party’s brief qualify as judicial admissions that can be
used against them for purposes of summary judgment. American Title Ins. Co. v. Lacelaw Corp., 861
F.2d 224, 226 (9th Cir. 1988).
60Id. at 3.
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VPX did not independently choose to engage in the Super Creatine scheme; VPX had
no capacity to make an independent choice. Mr. Owoc made the choice, and because
he was VPX’s only decision-maker, the law attributed that choice to VPX as well.
The jury in the Monster False Advertising Litigation found VPX and Mr. Owoc
jointly and severally liable for willful false advertising. Mr. Owoc points to that
finding as proof that VPX was an “active participant” and equal wrongdoer, making
it ineligible to sue him. But that argument collapses under scrutiny. VPX’s liability
in the Monster False Advertising Litigation was the legal consequence of Mr. Owoc’s
own conduct being attributed to the entity he wholly controlled. The jury’s finding of
willfulness against VPX reflects Mr. Owoc’s willfulness, not some independent
institutional decision by VPX to deceive. VPX had no will of its own—Mr. Owoc has
admitted as much. A finding of equal liability against an entity with no independent
decision-making capacity is not a finding of equal responsibility in the sense the
doctrine requires.
Put plainly: you cannot be in equal fault with yourself. Mr. Owoc was VPX.
The conduct was his. The liability was his, attributed back to the corporate form he
owned and controlled. Allowing him to point to that attribution as a shield against
accountability to VPX would be, as the Delaware Court of Chancery put it, “to let
fiduciaries 	immunize 	themselves 	through 	their 	own 	wrongful, 	disloyal 	acts—a
“transparently silly result.”61 The doctrine was designed to prevent courts from
refereeing disputes between wrongdoers. There is only one wrongdoer here.
61Stewart v. Wilmington Trust SP Servs., 112 A.3d 271, 304 (Del. Ch. 2015).
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iii. The Fiduciary Duty Exception
Even setting aside the threshold problem just described, the defense fails for
an additional and independent reason: in pari delicto has never been applied, in
Florida or elsewhere, to bar a corporation’s claim against its own officer for breach of
the duty that officer owed to the corporation. The doctrine has been applied to bar
trustees’ claims against third parties including auditors, lawyers, and investment
bankers, who allegedly failed to detect or prevent corporate fraud.62 That is a
fundamentally different situation. In those cases, the defendant owed no duty to the
corporation as a fiduciary; the imputation framework was being used to level the
playing field between a wrongdoing corporation and a professional who facilitated the
wrong. Here, Mr. Owoc is the wrongdoer, and the claim is that he violated the specific
duty he owed to VPX as its officer and director. Extending in pari delicto to that
situation would not level a playing field. It would immunize the very person whose
faithlessness is the subject of the suit.
This distinction is recognized across jurisdictions. 	Courts applying Delaware
corporate law, which Florida courts regularly consult on matters of corporate
governance, have held that in pari delicto does not bar a claim by a corporation or its
representative against the corporation’s own faithless fiduciary.63 The reasoning is
intuitive: a fiduciary cannot use the consequences of his own breach to immunize
62See, e.g., O’Halloran v. PricewaterhouseCoopers LLP, 969 So. 2d 1039, 1046 (Fla. 2d DCA
2007).
63Stewart v. Wilmington Trust SP Services, Inc., 112 A.3d 271, 303–04 (Del. Ch. 2015), aff’d,
126 A.3d 1115 (Del. 2015).
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himself from accountability for that breach. As previously stated, to hold otherwise
“would be to let fiduciaries immunize themselves through their own wrongful,
disloyal acts—a transparently silly result.”64 The Eleventh Circuit has stated that it
relies “with confidence upon Delaware law to construe Florida corporate law” and
that “Florida courts have relied upon Delaware corporate law to establish their own
corporate doctrines.”65
This Court need not predict whether Florida would adopt the full doctrinal
framework of the fiduciary duty exception as Delaware has articulated it. It is enough
to observe that no court, in Florida or elsewhere, has applied in pari delicto to defeat
a corporation’s own fiduciary duty claim against its own officer. This Court declines
to be the first. Equity does not immunize faithless fiduciaries from the claims of the
entities they betrayed.
iv. The Bateman Eichler Test—An Additional and
Independent Basis for Rejection
Even 	if 	all 	of 	the 	above 	analysis 	were 	set 	aside, 	the 	defense 	would
independently fail the two-part test the Supreme Court established in Bateman
Eichler, Hill Richards, Inc. v. Berner,66 the very case Mr. Owoc relies upon.
Bateman Eichler holds that in pari delicto does not bar a claim unless two
conditions are met: (1) the plaintiff bears “at least substantially equal responsibility”
for the underlying violations, and (2) preclusion of the suit would not “significantly
64Id.
65Int’l Ins. Co. v. Johns, 874 F.2d 1447, 1459 n.22 (11th Cir. 1989).
66 Bateman Eichler, Hill Richards, Inc. v. Berner, 472 U.S. 299 (1985)
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interfere with the effective enforcement” of the relevant law.67 Both conditions must
be satisfied. If either fails, the defense does not apply.
The Court assumes, without deciding, that the first condition is technically met
given VPX’s joint and several liability in the Monster False Advertising Litigation.
That assumption is generous to Mr. Owoc for reasons already explained. But the
second condition independently defeats his argument.
Consider the consequences of applying in pari delicto to facts like these. Mr.
Owoc was the sole director, sole shareholder, and chief executive of VPX. As he
himself admits, VPX had no corporate will independent of his. Under Florida law, he
owed VPX fiduciary duties—a duty of care and a duty of loyalty—that obligated him
to act in the company’s best interest and not to expose it to catastrophic liability
through willful misconduct.68
If in pari delicto applies whenever a sole owner-operator’s misconduct is
attributed back to the corporation he controlled, and under basic agency principles it
always will be, then the defense would be available in every such case, without
exception. The sole director breaches his duty, the corporation suffers harm, but no
one can ever enforce the duty because the corporation is deemed an equal participant
in the breach. The fiduciary obligation owed by a sole owner-operator to his
corporation would be, in practice, unenforceable. Not as a matter of bad luck in a
particular case, but as a structural feature of the law as applied to every sole owner-
67Id. at 310–11.
68Fla. Stat. § 607.0830(1); § 607.08411(1)–(2).
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operator. That result would systematically immunize the most powerful actors in
closely held corporations from the most fundamental obligations corporate law
imposes on them.
That is precisely the type of systemic interference with the enforcement of legal
obligations that Bateman Eichler’s second prong was designed to prevent. The
defense fails on this ground as well.
v. Public Policy
For the same reasons, application of in pari delicto here would be contrary to
public policy under the framework this district has applied.69 Here, the doctrine’s
purposes to deter wrongdoing and keep courts out of disputes between equally
culpable parties would be inverted, not served. Applying the defense would not deter
wrongdoing; it would insulate it. It would not keep courts out of disputes between
wrongdoers; it would prevent a court of equity from providing the remedy that
innocent creditors are owed. The Trust’s recovery, if any, flows to VPX’s unsecured
creditors—parties who had nothing to do with Mr. Owoc’s conduct and everything to
lose from it.
3. Unclean Hands
Defendant next invokes the doctrine of unclean hands, an equitable defense
rooted in the maxim that "he who comes into equity must come with clean hands."70
It bars a party from obtaining relief when that party has engaged in inequitable
69In re Gosman, 382 B.R. 826, 838 (S.D. Fla. 2007).
70Precision Instrument Mfg. Co. v. Automotive Maintenance Machinery Co., 324 U.S. 806, 814
(1945).
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conduct related to the matter before the court.71 The doctrine is closely related to in
pari delicto, but has traditionally been applied when a plaintiff seeks equitable relief
rather than money damages.
In 	the 	Eleventh 	Circuit, 	a 	defendant 	asserting 	unclean 	hands 	must
demonstrate two things: (1) that the plaintiff's wrongdoing is directly related to the
claim asserted; and (2) that the defendant was personally injured by the plaintiff's
conduct.72
The first element is arguably met here. VPX was found jointly liable for the
false advertising that forms the basis of Count Three, and so VPX's wrongdoing is
directly “related to the claim.” But the second element is not met. Mr. Owoc cannot
credibly claim to have been personally injured by VPX's conduct because VPX's
"conduct" was his conduct. He was the sole director, sole officer, and sole decision-
maker. He devised the Super Creatine compound and directed its marketing. VPX
did not act upon Mr. Owoc to his detriment; Mr. Owoc acted through VPX. He is not
a victim of VPX's wrongdoing; he is its sole author.
4. Abuse of Process
Defendant next argues abuse of process, an intentional tort that arises when a
party misuses legal process for a purpose other than that for which it was designed.
Under Florida law, a claim for abuse of process requires: (1) an illegal, improper, or
perverted use of process; (2) an ulterior motive or purpose; and (3) resulting
71Id.
72Calloway v. Partners Nat'l Health Plans, 986 F.2d 446, 450–51 (11th Cir. 1993).
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damages.73 Critically, “there is no abuse of process, however, when the process is used
to accomplish the result for which it was created. . .”74
Defendant has not identified any cognizable abuse. Filing a motion for
summary judgment supported by preclusive findings from a prior federal court
proceeding is regular use of litigation tools, not a perversion of the judicial process.
To accept Defendant’s argument would mean that any prevailing party who relies on
a prior judgment to streamline subsequent litigation is engaged in abuse of process.
That is not the law.
C. Other Arguments
The 	Defendant 	raises 	a 	series 	of 	additional 	arguments. 	The 	Court 	has
considered each and finds them without merit.
1. The Business Judgment Rule
Defendant argues that the business judgment rule shields his marketing
decisions from judicial scrutiny. The business judgment rule creates a presumption
that in making a business decision, directors acted on an informed basis, in good faith,
and in the honest belief that the action taken was in the best interests of the
corporation.75 The rule exists because courts recognize that directors are generally
better positioned than judges to evaluate the risks and rewards of corporate decisions,
even if those decisions ultimately harm the corporation.
73Della-Donna v. Nova University, Inc., 512 So. 2d 1051, 1053 (Fla. 4th DCA 1987).
74Bothmann v. Harrington, 458 So. 2d 1163, 1169 (Fla. 3d DCA 1984).
75Aronson v. Lewis, 473 A.2d 805, 812 (Del. 1984).
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The presumption, however, is rebuttable. A plaintiff may overcome it by
demonstrating that the director breached any one of the triads of fiduciary duty —
good faith, loyalty, or due care.76 If any of these preconditions are absent, the rule's
protections are overcome. One applicable category of bad faith conduct sufficient to
rebut the presumption is “where the fiduciary acts with the intent to violate
applicable positive law.”77
That applies here. A federal jury found, after seven weeks of evidence, that Mr.
Owoc's advertising of Super Creatine was willful and deliberate — that he knew the
advertising was false or misleading, or acted with indifference to whether it was. That
finding establishes that Mr. Owoc knowingly caused VPX to engage in illegal conduct
that violated the Lanham Act. A director who knowingly causes his corporation to
violate federal law is not acting in good faith and is not acting in the honest belief
that his conduct serves the corporation's best interests. The business judgment rule's
presumption is rebutted by such conduct. This is not a case of a business judgment
gone wrong — a risky but good-faith marketing strategy that backfired. It is a case
of a director who caused his corporation to make claims he knew were false or
misleading, or acted with indifference to whether they were false or misleading. The
rule was not designed to shield such behavior.
2. Sole Ownership Does Not Eliminate Fiduciary Duties
76Cede & Co. v. Technicolor, Inc., 634 A.2d 345, 361 (Del. 1993).
77In re Walt Disney Co. Derivative Litig., 906 A.2d 27, 67 (Del. 2006).
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Defendant argues that his sole ownership of VPX precludes a breach of
fiduciary duty claim absent minority shareholders or insolvency. The sole case he
cites, Taubenfeld v. Lasko,78 refutes rather than supports his position. Taubenfeld
holds that officers and directors are “liable for damages to the corporation which
result from a breach of their trust, a violation of authority or neglect of duty,” and
explains that this liability derives from the common law rule that “every agent is
responsible to his principal for such acts which result in damage to the principal.”79
The 	principal 	is 	the 	corporation—not 	any 	particular 	shareholder 	or 	class 	of
shareholders. The duty exists because an agent owes obligations to the entity he
serves, and it has nothing to do with whoever holds equity. Neither Taubenfeld nor
the Florida Business Corporations Act conditions fiduciary duties on the presence of
minority shareholders.80 And as discussed in the Court’s analysis of in pari delicto,
conditioning the duty as such would be contrary to public policy.
3. Insolvency Is Not an Element of the Claim
Defendant devotes considerable briefing to VPX’s solvency, citing audited
financials, EBITDA figures, and credit facilities. Defendant argues that VPX was, at
certain points, a commercially successful enterprise. But insolvency is not an element
of a breach of fiduciary duty claim. The elements are duty, breach, and damages—
nothing more. The damage here is the False Advertising Judgment approaching $300
78Taubenfeld v. Lasko, 324 So. 3d 529 (Fla. 4th DCA 2021).
79Id. (quoting Flight Equip. & Eng’g Corp. v. Shelton, 103 So. 2d 615, 627 (Fla. 1958)).
80Fla. Stat. §§ 607.0830(1), 607.08411(1)–(2).
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million. That is damage to VPX as a corporate entity regardless of whether the
judgment rendered VPX insolvent. No Florida statute or case law conditions liability
on the corporation’s solvency. If the law were otherwise, a wrongdoing fiduciary could
escape accountability so long as the corporation’s balance sheet remained in the
black, no matter how reckless the conduct.
4. Cause of Financial Distress
Defendant argues that VPX’s financial distress had multiple causes—the OBI
arbitration,81 credit facility defaults, the PepsiCo termination,82 macroeconomic
conditions. This misses the mark. The Trust does not need to prove that the Super
Creatine Scheme was the sole cause of VPX’s insolvency, nor does it need to prove
that the breach caused insolvency at all. The damage is the False Advertising
Judgment approaching $300 million —a specific, quantifiable harm with a direct
causal chain. Mr. Owoc directed the false advertising, Monster sued, the jury found
willful false advertising, and VPX was held liable. The existence of other harms does
not sever that chain.
5. The Orange Bang Arbitration
Relatedly, 	Defendant 	emphasizes 	the 	OBI/Monster 	arbitration—which
imposed approximately $175 million in liability on VPX alone—as evidence that Mr.
Owoc bears no personal responsibility. The argument is that because VPX was held
81This litigation arose from VPX's violation of a trademark settlement agreement with
Orange Bang, Inc. and resulted in approximately $175 million in liability against VPX. It is the
subject of Count Four of the Second Amended Complaint.
82Mr. Owoc's unilateral termination of VPX's exclusive distribution agreement with PepsiCo,
which spawned multiple lawsuits and a confidential settlement.
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liable but Mr. Owoc was not, the OBI result undermines the Trust’s theory. It does
not. The OBI arbitration involved different legal claims—trademark infringement,
not false advertising—and different legal theories. It is the subject of a separate count
of the Second Amended Complaint. This Motion concerns Count Three and the
damage arising from the False Advertising Judgment, for which Mr. Owoc was found
personally liable. The fact that an arbitrator in a different proceeding reached a
different liability allocation on different claims does not create a genuine dispute of
material fact.
VI. Defendant’s Cross-Motion
Defendant’s Cross-Motion rests on the same arguments the Court just rejected.
It also suffers from a procedural deficiency: it is not a motion at all, but rather a
request for affirmative relief embedded in a responsive brief. Under Federal Rule of
Civil Procedure 7(b), a request for a court order must be made by motion.83 A response
is not a motion.84 And while Rule 56(f)(1) authorizes the Court to grant summary
judgment for a nonmovant, that provision is a tool available for the Court to employ
in its discretion; it is not a vehicle for a party to file a cross-motion by another name
without complying with the procedural requirements.85
83Fed. R. Civ. P. 7(b), incorporated by Fed. R. Bankr. P. 7007.
84CompRehab Wellness Grp., Inc. v. Sebelius, No. 11-23377-CIV, 2013 WL 1827675, at *7 n.20
(S.D. Fla. Apr. 30, 2013); Anderson v. Branch Banking & Trust Co., 119 F. Supp. 3d 1328, 1351 (S.D.
Fla. 2015).
85Abreu v. EB & JB Corp., No. 14-23266-CIV, 2015 WL 12570946, at *1 (S.D. Fla. Dec. 8, 2015)
(“Rule 56(f)(1) explicitly refers to the court’s authority to grant relief for a nonmovant. If a party moved
for summary judgment, by definition, it cannot be considered a nonmovant and thus Rule 56(f)(1)
would be inapplicable.”).
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Even if the Cross-Motion were properly filed, it fails on the merits for the
reasons already stated. The Cross-Motion is denied.
VII. Conclusion
The record in this case tells a straightforward story. Mr. Owoc was VPX’s sole
fiduciary. He devised the Super Creatine compound, directed VPX to market it with
health claims that a federal jury found to be willfully and deliberately false, and in
doing so exposed VPX to a judgment approaching $300 million. Collateral estoppel
bars relitigation of those findings. Each element of the Trust’s breach of fiduciary
duty claim—duty, breach, and damages—is established as a matter of law. None of
Defendant’s arguments creates a genuine dispute of material fact, and the equitable
and legal defenses he raises are either waived, inapplicable, or contrary to public
policy.
Accordingly, the Court ORDERS:
1. 	The Liquidating Trust’s Motion to Take Judicial Notice of Certain Filings in
Monster Energy Co. v. Vital Pharms., Inc. in Support of Motion for Partial
Summary Judgment [Dkt. No. 365] is GRANTED.
2. 	The Liquidating Trust’s Motion for Partial Summary Judgment on Count
Three of the Second Amended Complaint [Dkt. No. 364] is GRANTED.
Defendant John H. Owoc is liable for breach of fiduciary duty as alleged in
Count Three. The Court’s determination of damages is reserved for further
proceedings.
3. 	Defendant’s Cross-Motion for Summary Judgment [Dkt. No. 384] is DENIED.
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# # #
Copies To:
All Parties in Interest.
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