VPX Liquidating Trust v. Owoc et al

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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. 24-01009-PDR
v.
JOHN H. OWOC, et al.,
Defendants.
________________________________________ 	/
MEMORANDUM OPINION GRANTING
PRELIMINARY INJUNCTION AGAINST ELITE ISLAND LLC
Peter D. Russin, Judge
United States Bankruptcy Court
_____________________________________________________________________________
ORDERED in the Southern District of Florida on May 5, 2026.
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Between July 2020 and October 2022, while facing hundreds of millions of
dollars 	in 	litigation 	exposure, 	the 	former 	sole 	owner 	and 	CEO 	of 	Vital
Pharmaceuticals, Inc. caused the company to transfer nearly ten million dollars of its
funds to acquire and maintain a luxury property on a private island in the Florida
Keys — property that was titled not in the company's name but in the name of a shell
entity 	he 	controlled. 	VPX 	received 	nothing 	in 	return. 	VPX's 	creditors, 	now
represented by the VPX Liquidating Trust, seek to recover that property as a
fraudulent transfer.
The question before the Court at the preliminary injunction stage is whether
the Trust has demonstrated a sufficient likelihood of success on its fraudulent
transfer claims to justify restraining the shell entity — Elite Island LLC — from
encumbering or transferring the property before those claims are tried. The answer
is yes.
The preliminary injunction hearing was held on April 22, 2026 (the “PI
Hearing”), on the Motion of the VPX Liquidating Trust for a Temporary Restraining
Order and Preliminary Injunction Against Elite Island LLC (the “TRO/PI Motion”).1 The
Court received into evidence stipulated exhibits, the Amended Stipulation of Undisputed
Facts for Preliminary Injunction Hearing (the “Amended Stipulation”),2 and the de bene esse
deposition transcript of Soneet R. Kapila.3 The Court heard the live testimony of Joseph
1Dkt. No. 452.
2Dkt. No. 525. The parties initially filed a Stipulation of Undisputed Facts for Preliminary
Injunction Hearing [Dkt. No. 524] on April 20, 2026, and subsequently filed the operative Amended
Stipulation. The Court’s citations to the stipulated record are to the Amended Stipulation.
3Dkt. No. 532.
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C. Gioconda, Esq., the Trust's litigation risk expert, and the testimony of Defendant
John H. Owoc. At the close of the hearing, the Court ruled from the bench that a
preliminary injunction would issue and entered a short form order the following day
(the “PI Order”).4 This Opinion sets forth the findings of fact and conclusions of law
in support of that ruling.
I. Jurisdiction
The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and
1334. This is a core proceeding under 28 U.S.C. §§ 157(b)(2)(A), (H), and (O). Venue
is proper in this district pursuant to 28 U.S.C. §§ 1408 and 1409.
II. Procedural History and Factual Findings
The following background is drawn from the stipulated record, the exhibits
admitted into evidence at the PI Hearing, and the testimony received at that
hearing. The facts relevant to the preliminary injunction fall into three categories:
the procedural history leading to this proceeding and to the injunctive relief already
entered; the nature and circumstances of the transfers at issue; and the financial
condition of VPX at the time those transfers were made. The Court addresses each
in turn, reserving for Section IV its legal analysis of the preliminary injunction
factors.
A. Procedural History
The Trust commenced this adversary proceeding on January 18, 2024.5 Counts
Twenty-Eight through Thirty-One of the operative Second Amended Complaint, filed
4Dkt. No. 534.
5Dkt. No. 1.
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September 16, 2024, are addressed to Defendant Elite Island LLC (“Elite Island”) and
seek to avoid and recover, as fraudulent transfers under 11 U.S.C. §§ 544, 548, and
550 and the Florida Uniform Fraudulent Transfer Act (“FUFTA”), Fla. Stat. §§
726.105 	and 	726.108, 	transfers 	of 	approximately 	$9.7 	million 	in 	Vital
Pharmaceuticals, Inc. (“VPX”) funds.6
On June 21, 2024, the Trust recorded a Notice of Lis Pendens against the
Overseas Highway Property in connection with its claims seeking recovery of that
property.7 Under Florida law, that lis pendens expired automatically on January 18,
2025—one year after the filing of this adversary complaint, the Trust having sought
no extension.8 As a practical matter, however, the lis pendens remained of record and
continued to cloud title. On February 18, 2026, Owoc moved to dissolve it.9 The Court
denied Owoc’s motion for lack of standing but, recognizing that the lis pendens had
expired by operation of law, sua sponte discharged the lis pendens pursuant to Fla.
Stat. § 48.23(2).10
What followed was a rapid series of events. Just days before the sua sponte
discharge order was entered, on March 21, 2026, Elite Island’s 2026 Florida LLC
Reinstatement was filed with the Secretary of State, despite Elite Island having been
administratively dissolved since September 2025.11 The reinstatement filings added
6Second Amended Complaint, Dkt. No. 224.
7Dkt. No. 106.
8Fla. Stat. § 48.23(2).
9Dkt. No. 405.
10Dkt. No. 433.
11Ex. 23.
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two new authorized members—Proprietary Property LLC and Paul Borrelli, a former
VPX employee and current business associate of Owoc—who had not previously
appeared in Elite Island’s corporate filings.
On March 25, 2026, Owoc—joined by his wife and co-defendant Megan Owoc,
who were proceeding pro se at the time—filed an Emergency Motion for Extension of
Time to Retain Successor Counsel (the “Extension Motion”), in which the Owocs
expressly confirmed their intent to “arrange and close financing” secured by the
Overseas Highway Property.12 In response, the Trust filed the TRO/PI Motion on
March 31, 2026, seeking emergency relief to prevent the Property from being
encumbered, transferred, or otherwise disposed of before the Trust’s fraudulent-
transfer claims could be adjudicated.13
The Court held the TRO hearing on April 2, 2026, and granted the temporary
restraining order from the bench. The TRO Order was entered on April 3, 2026, and
initially set the evidentiary hearing on the preliminary injunction for April 15, 2026—
within 	the 	fourteen-day 	window 	required 	under 	Rule 	65(b)(2).14 	The 	Court
subsequently continued the preliminary injunction hearing to April 22, 2026, because
Elite Island had recently retained counsel on a limited basis and because of
scheduling difficulties involving the Trust’s in-person witnesses. In advance of the PI
12Dkt. No. 437 at 2.
13Dkt. No. 452.
14Dkt. No. 460.
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Hearing, the Court entered a pre-hearing order identifying several threshold legal
issues the parties were directed to brief.15
At the PI Hearing on April 22, 2026, the Court received into evidence the
parties’ stipulated exhibits,16 the Amended Stipulation, and Mr. Kapila’s de bene esse
deposition transcript. The Court heard the live testimony of Mr. Gioconda and the
testimony of Mr. Owoc subject to the Trust’s reserved objection based on lack of prior
disclosure. At the conclusion of the hearing, the Court ruled from the bench that a
preliminary injunction would issue and entered a short form order the following day
setting forth the operative restraints and indicating that this fuller opinion would
follow.17
B. The Overseas Highway Property and the Transfers at Issue
VPX was a Florida corporation that manufactured and marketed sports
nutrition products and energy drinks, including its flagship Bang energy drink. VPX
was founded by Defendant John H. Owoc (“Owoc”), who at all relevant times served
as its sole shareholder, sole director, and Chief Executive Officer.18 On October 10,
2022 (the “Petition Date”), VPX and its affiliates filed voluntary petitions for relief
under Chapter 11 of the Bankruptcy Code. A plan of liquidation was ultimately
15Dkt. No. 451.
16The parties stipulated to the admissibility of Exhibits 1, 3, 4, 5, 6, 7, 9, 10, 16, 17, 18, 22, 23, 53,
54, 55, 56, 57, 58, and 59 for all purposes at the PI Hearing. Other listed exhibits were identified for
reference only. The Court has not considered exhibits not admitted into evidence.
17Dkt. No. 534.
18Ex. 54, Resps. to Requests for Admission Nos. 1, 2, 4.
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confirmed, and the VPX Liquidating Trust (the “Trust” or “Plaintiff”) was established
as successor to the Debtors’ estates.
Elite Island was organized as a Florida limited liability company, with Owoc
as its sole member and manager at the time of formation.19 Elite Island is not, and
has never been, part of VPX’s corporate structure or operations.20 Yet Elite Island’s
address on the recorded Warranty Deed is 1600 North Park Drive, Weston, Florida—
the same address as VPX’s corporate office.21
On July 29, 2020, VPX transferred $250,000 to Kalis Kleiman & Wolfe
concerning real property located at 72100 Overseas Highway, Islamorada, Florida
(the “Overseas Highway Property” or the “Property”).22 On August 31, 2020, Solid
Investment Group 7 LLC conveyed the Overseas Highway Property to Elite Island by
Warranty Deed.23 The Overseas Highway Property is Elite Island’s sole asset.24
The entire purchase price for the Overseas Highway Property was paid by
VPX. On August 31, 2020, at Owoc’s direction, VPX wired $8,304,171.78 from its PNC
Bank operating account to the escrow account of the Torrens Law Firm PLLC at TD
Bank, 	the 	closing 	agent 	for 	the 	transaction.25 	The 	originator-to-beneficiary-
19Amended Stipulation ¶¶ 1–2.
20Amended Stipulation ¶ 3.
21Ex. 18 (Warranty Deed, recorded Sept. 8, 2020, Doc. No. 2280700, Monroe Cnty. O.R. Bk. 3042,
Pg. 1859).
22Ex. 9.
23Ex. 18; Amended Stipulation ¶¶ 6–7. The Property consists of Lots 5, 6, 7, 8, and 9 of Craig
Cay, as recorded in Plat Book 3, Page 73 of the Public Records of Monroe County, Florida.
24Amended Stipulation ¶ 8.
25Ex. 4; Amended Stipulation ¶ 5.
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information field on the wire identified the purpose of the transfer as “File # 20-025A
Prop. Location: 72100 Overseas Highway Islamorada FL 33036.”26 The documentary
stamp tax paid on recordation of the Warranty Deed was $58,129.40, which at
Florida’s rate of $0.70 per $100 of consideration corresponds to a purchase price of
approximately $8,304,200.27 Title vested in Elite Island.28
Owoc’s control over Elite Island is further established by contemporaneous
recorded instruments. On the date of acquisition, Owoc executed—as “Manager” of
Elite Island—a recorded Assignment of Development Rights, Approvals, Permits, and
Contracts pertaining to the Overseas Highway Property.29 On December 28, 2021,
Owoc signed, as “Manager” of Elite Island, a Monroe County Dwelling Unit Lock-Out
Deed Restriction pertaining to the Overseas Highway Property, which was recorded
January 19, 2022.30
In addition to the initial $250,000 transfer and the $8.3 million purchase price,
Owoc directed VPX to pay substantial additional sums for construction, renovation,
maintenance, and other carrying costs associated with the Overseas Highway
Property.31 Those payments include, among others: (i) three wire transfers to KMR
Construction Management, Inc. totaling $855,291.28 between October 2, 2020 and
26Ex. 4.
27Ex. 18.
28Ex. 18; Amended Stipulation ¶ 7.
29Ex. 18 (Assignment of Development Rights, recorded Sept. 8, 2020, Doc. No. 2280701).
30Ex. 18 (Dwelling Unit Lock-Out Deed Restriction, Doc. No. 2357558).
31Ex. 9; Amended Stipulation ¶¶ 9–12.
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November 24, 2021 for construction work on the Property;32 (ii) five payments to
Affiniti Architects Holding, LLC totaling $225,191.00 between December 10, 2020
and September 21, 2021 for architectural services;33 (iii) two payments to Keys
Engineering Services totaling $60,927.00 in January and July 2021 for engineering
services;34 (iv) two payments to the Monroe County Tax Collector totaling $51,161.82
for the 2020 and 2021 property taxes;35 and (v) nineteen monthly payments to the
Florida Keys Aqueduct Authority for water services, continuing from January 8, 2021
through October 1, 2022—just nine days before VPX’s Chapter 11 petition.36 In the
aggregate, 	between 	July 	29, 	2020 	and 	October 	1, 	2022, 	VPX 	transferred
$9,747,727.82 to third parties in connection with the Overseas Highway Property and
Elite Island (collectively, the “Elite Island Transfers”).37
Every one of the Elite Island Transfers was recorded in VPX’s general ledger
to a single account—Account 304000, titled “Distributions.”38 VPX’s books repeatedly
refer to the Overseas Highway Property as “Jack’s house.”39 Owoc’s personal approval
of specific payments appears in his own email correspondence.40 Nothing flowed
32Amended Stipulation ¶ 9(a); Ex. 5; Ex. 9.
33Amended Stipulation ¶ 9(b); Ex. 9.
34Amended Stipulation ¶ 9(c); Ex. 9.
35Amended Stipulation ¶ 9(d); Ex. 6; Ex. 9.
36Amended Stipulation ¶ 9(e); Ex. 9.
37Amended Stipulation ¶ 11; Ex. 9.
38Ex. 9; Amended Stipulation ¶ 12.
39Ex. 9 (general ledger entries for monthly water-bill payments, each bearing the descriptive
header “Water bill-Jacks house-Fl Key”).
40Ex. 7.
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back—Elite Island never transferred money or property to VPX in connection with
the Elite Island Transfers or otherwise.
Owoc exercised plenary authority over the Elite Island Transfers of VPX funds
during the relevant period.41 Significantly, Owoc has admitted, in response to the
Trust’s Request for Admission No. 165, that he “used the Debtors’ funds to purchase
the Overseas Highway Property.”42
C. The Company’s Financial Condition
The Trust’s fraudulent transfer claims turn on VPX’s solvency at the time of
the Elite Island Transfers, and insolvency was the central contested issue at the PI
Hearing. This subsection sets out the evidence relevant to that question. The Court’s
analysis and conclusions on insolvency follow in Section IV.A below, where insolvency
is treated as an element of the Trust’s fraudulent transfer claims.
Four dates frame the analysis. First, October 10, 2022, the Petition Date,
which is the endpoint for both the federal and FUFTA lookback periods. Second,
October 10, 2020, the date two years before the Petition Date that marks the outer
boundary of the federal two-year lookback under 11 U.S.C. § 548. Third, July 29,
2020, the date of the first Elite Island Transfer: the $250,000 VPX wired to Kalis
Kleiman & Wolfe. Fourth, August 31, 2020, the date of the principal Elite Island
Transfer—the $8,304,171.78 wire used to acquire the Overseas Highway Property.
Of the $9,747,727.82 in Elite Island Transfers, the $250,000 initial transfer,
the $8,304,171.78 principal wire, and the October 2 wire to KMR Construction
41Ex. 54, Resps. to Requests for Admission Nos. 10, 85, 87; Amended Stipulation ¶ 13.
42Ex. 54, Resp. to Request for Admission No. 165.
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Management were made before October 10, 2020; the remaining transfers—further
construction payments, architectural and engineering fees, property taxes, and
water-service payments—were made after October 10, 2020 and run through October
1, 2022.
1. The Litigation Exposure Preceding the Transfers
On September 4, 2018—approximately two years prior to the principal Elite
Island Transfer—Monster Energy Company (“Monster”) filed suit against VPX in the
Central District of California, alleging willful and deliberate false advertising of
VPX’s flagship Bang energy drink (the “False Advertising Litigation”).43 Monster
alleged that VPX’s marketing was predicated on a falsehood—that Owoc and VPX
engaged in false advertising by propagating false claims that a molecule VPX branded
as “Super Creatine” produced a host of health benefits. The complaint put Owoc and
VPX on notice that the core marketing proposition underlying the Bang product had
been 	challenged 	as 	false. 	The 	False 	Advertising 	Litigation 	proceeded 	through
discovery, trial, post-trial motions, and ultimately a $271,924,174 jury verdict against
VPX, with express findings that the false advertising was both willful and deliberate.
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 whether
their advertising was false or misleading.”44
43Monster Energy Co. v. Vital Pharms., Inc., No. 5:18-cv-01882-JGB-SHK (C.D. Cal., filed Sept. 4,
2018).
44Jury Instructions, Monster Energy Co. v. Vital Pharms., Inc., No. 5:18-cv-01882-JGB-SHK (C.D.
Cal.), Trial Tr. 28:23–29:5. The Court takes judicial notice of the jury instructions and final
judgment in the Monster litigation as court records of another proceeding whose accuracy cannot
reasonably be questioned. See Fed. R. Evid. 201(b)(2), (c)(1).
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Owoc testified at the PI Hearing—over the Trust’s reserved objection—that at
the time the False Advertising Litigation was filed he believed there was “a 0 percent
chance . . . that we would lose,” and that he therefore set aside no money for the
contingent liability the lawsuit represented.45
The False Advertising Litigation was not the only significant contingent
liability VPX faced at the time of the Elite Island Transfers. The Bang trademark—
for beverages, including isotonic energy drinks—had originally belonged to Orange
Bang, Inc. (“OBI”), which had alleged that VPX’s use of the Bang mark infringed
OBI’s rights. To resolve that dispute, VPX and OBI entered into a 2010 written
settlement and coexistence agreement that permitted VPX to continue using the
Bang mark, but only under specified conditions: in particular, VPX could sell its
Bang-branded products in certain channels of trade only if the product was creatine-
based.46 On June 16, 2020—approximately ten weeks before the principal Elite Island
Transfer—OBI initiated an arbitration against VPX (the “OBI Arbitration”) alleging
that Bang was not creatine-based within the meaning of the 2010 agreement, that
VPX had therefore violated the channel-of-trade restrictions by selling broadly, and
that the resulting infringement entitled OBI to disgorgement of VPX’s profits, which
totaled hundreds of millions of dollars.47
45Hearing Testimony, Apr. 22, 2026 (Owoc testimony).
46Hearing Testimony, Apr. 22, 2026 (Gioconda testimony describing the parties’ dispute, the
resulting 2010 settlement and coexistence agreement, and the channel-of-trade limitations).
47Hearing Testimony, Apr. 22, 2026 (Gioconda testimony); Kapila Depo at 31:21–32:7.
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VPX faced yet another significant contingent liability, though it arose shortly
after the principal Elite Island Transfer. On October 23, 2020, VPX terminated its
national 	distribution 	agreement 	with 	PepsiCo 	without 	cause, 	precipitating
arbitration proceedings (the “Pepsi Arbitration”) in which PepsiCo asserted breach of
contract and related claims seeking damages measured in the hundreds of millions
of dollars—an exposure that, on Mr. Gioconda’s analysis, ultimately translated to a
recognized contingent liability for VPX of approximately $141.6 million.48 While the
Pepsi exposure postdates the principal August 31, 2020 Elite Island Transfer, it
predates all but one of the carrying cost transfers identified in the Amended
Stipulation.
Accordingly, at the time of the principal Elite Island Transfer, two of the three
major contingent liabilities that Mr. Kapila ultimately analyzed were already in
place: Monster had been pending for nearly two years, and OBI had been initiated
ten weeks earlier. As to the carrying cost transfers made on or after October 23, 2020,
all three contingent liabilities were in place.
2. Mr. Kapila’s Balance-Sheet Analysis
Soneet R. Kapila, the Trust’s financial expert, was qualified at his deposition
as an expert in insolvency accounting without objection.49 Mr. Kapila is a CPA,
Certified Fraud Examiner, Certified Insolvency and Restructuring Advisor, and
federal bankruptcy panel trustee, and he serves as the sitting chairman of the
48Hearing Testimony, Apr. 22, 2026 (Gioconda testimony); Kapila Depo at 30:15–23, 32:8–22.
49Kapila Depo at 5:10–9:22.
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American Bankruptcy Institute board of directors.50 Based on his review of VPX’s
audited financial statements and other materials, he concluded that VPX was
continuously insolvent from September 4, 2018 through the Petition Date.51 His
methodology applied fair value adjustments to VPX’s audited financial statements
and used the standard insolvency frameworks under both state and federal law,
principally the Balance Sheet Test (fair value of assets compared to total liabilities)
and the Cash Flow Test (whether the debtor is generally not paying its debts as they
become due).52
Mr. Kapila made four principal fair value adjustments to the Company’s
reported balance sheets. First, he excluded variable interest entity real property
assets that had been titled away from VPX but acquired with VPX funds, without any
offsetting reduction in the corresponding liabilities because VPX remained obligated
on 	the 	underlying 	debt.53 	Second, 	he 	reduced 	leasehold 	improvement 	and
construction in progress values to zero where tied to variable interest entity real
estate or otherwise not monetizable.54 Third, he made an upward adjustment of
intangibles to $5 million, based on Mr. Gioconda’s valuation opinion; Mr. Kapila
adopted the high end of Mr. Gioconda’s $3.5 million–$5 million range to resolve any
50Kapila Depo at 5:10–8:4.
51Kapila Depo at 11:16–19.
52Kapila Depo at 11:25–13:14. The Balance Sheet Test compares the fair value of the debtor’s
assets to the total of its liabilities. See Fla. Stat. § 726.103(1); 11 U.S.C. § 101(32)(A). The Cash Flow
Test asks whether the debtor is generally not paying its debts as they become due. See Fla. Stat. §
726.103(2).
53Kapila Depo at 20:6–22:18, 71:25–73:8.
54Kapila Depo at 19:14–20:21.
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valuation doubt in favor of solvency.55 Fourth, he recognized contingent litigation
liabilities for the Monster, OBI, and PepsiCo matters, using probability factors
supplied by Mr. Gioconda to discount each gross claim.56
Mr. Kapila’s year-end balance sheet deficit calculations are: approximately
$137.6 million at December 31, 2018; approximately $150.6 million at December 31,
2019; approximately $697.6 million at December 31, 2020; and approximately $548.6
million at December 31, 2021.57 He further concluded that VPX remained insolvent
on the Petition Date, with the Debtors’ schedules reflecting approximately $709
million in assets against approximately $1.1 billion in liabilities.58
Applying 	the 	Cash 	Flow 	Test, 	Mr. 	Kapila 	opined 	that 	VPX’s 	revenue
concentration was extreme—approximately 95% of sales came from the single Bang
product59—and 	that 	the 	litigation 	exposure 	threatening 	that 	revenue 	stream
undermined the Company’s ability to generate sufficient cash flow to meet its debts
as they came due.60
55Kapila Depo at 19:6–13, 22:14–25:8, 70:3–71:2.
56Kapila Depo at 25:15–28:15, 29:1–30:23.
57Kapila Depo. at 10:10–11:19, 15:16–17:15, 16:19–17:10, 34:5–34:23, 38:25–39:1. The Court
relies on Mr. Kapila’s admitted deposition testimony concerning Plaintiff’s Exhibit 12, including the
balance-sheet schedule attached as Exhibit B to his report, which Mr. Kapila identified and
explained during his testimony. The report itself was premarked as Plaintiff’s Exhibit 12 for
identification during the deposition, and Mr. Kapila testified that it was his March 16, 2026 expert
report and that having it available would assist him in describing his opinions.
58Kapila Depo at 34:5–38:5, 38:25–39:1.
59Kapila Depo at 39:24–40:1, 41:13–19.
60Kapila Depo at 41:2–43:17.
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On cross-examination, Mr. Kapila confirmed three points relevant here. First,
his year-end 2018 and 2019 insolvency conclusions depend on recognition of the
Monster contingent liability; if that liability is not recognized, or is recognized at a
probability factor below approximately 50%, VPX would not have been insolvent
under the Balance Sheet Test at year-end 2019.61 Second, he saw no evidence that
VPX became solvent at any point between December 31, 2019 and December 31,
2020.62 	Third, 	by 	year-end 	2020, 	the 	recognized 	contingent 	liabilities 	of
approximately $521.5 million were not necessary to the insolvency conclusion: even
excluding all three contingent liabilities, VPX’s adjusted balance sheet would have
shown approximately $176 million of insolvency at year-end 2020.63
3. Mr. Gioconda’s Testimony
Mr. 	Gioconda 	testified 	live 	at 	the 	PI Hearing. 	He 	is 	an 	attorney 	with
approximately twenty-nine years of experience in intellectual property litigation, the
founder of the Gioconda Law Group PLLC, and a former Chairman of the Board and
General Counsel of New Slice Ventures LLC, a beverage industry enterprise built
around acquired intellectual property assets.64 He has provided expert testimony on
intellectual property valuation and litigation risk matters on a number of prior
occasions. The Defendant did not object to Mr. Gioconda’s qualification as an expert
in intellectual property law or in the valuation of intellectual property assets. It did,
61Kapila Depo at 46:1–25, 55:12–56:2, 62:8–63:14, 69:6–20.
62Kapila Depo at 82:6–13.
63Kapila Depo at 60:10–61:4.
64Hearing Testimony, Apr. 22, 2026 (Gioconda direct examination).
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however, object to his qualification to opine on probabilities of adverse litigation
outcomes; the Court reserved on that objection at the hearing. The Court rules on it
in Section IV.A below, where the issue is presented as part of the merits analysis.
Mr. 	Gioconda 	described 	his 	methodology 	as 	adopting 	the 	posture 	of 	a
reasonable fiduciary assessing the risks presented by pending litigation at the time
it arose—evaluating the underlying facts as then known or reasonably knowable, the
applicable law, and the full range of potential remedies—to arrive at a probability of
adverse liability and a separate probability that any such liability, if found, would be
enterprise material, meaning that it would threaten the very existence of the
company.65
Applied to the False Advertising Litigation, Mr. Gioconda opined that as of
September 	2018—when 	the 	Monster 	complaint 	was 	filed—and 	continuing
throughout the relevant period, the probability that VPX would suffer adverse
liability was approximately 85%, and that any such adverse liability carried a 95%
probability of being enterprise material in scale.66 He further opined that by August
2020 the Monster adverse liability probability was “closer to 90% than 85%.” He
applied a similar framework to the OBI Arbitration (85%/95%) and the Pepsi
Arbitration (80%/85%). Mr. Kapila adopted those probability factors and recognized
contingent liabilities of approximately $231.1 million for Monster (recognized as of
65Hearing Testimony, Apr. 22, 2026.
66Hearing Testimony, Apr. 22, 2026.
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2018 forward), $148.75 million for OBI (recognized as of year-end 2020), and $141.6
million for PepsiCo (recognized as of year-end 2020).
III. Threshold Legal Issues
The Court’s pre-hearing scheduling order identified several threshold legal
issues the parties were directed to address before reaching the four preliminary
injunction factors. The Court takes them in order and concludes that none bars the
relief the Court has granted.
A. Grupo Mexicano Does Not Bar the Relief Sought
In Grupo Mexicano,67 the Supreme Court held that a federal court has no
authority to issue a preliminary injunction preventing a defendant from disposing of
its assets pending adjudication of a contract claim for money damages where the
plaintiff claims no lien or equitable interest in the defendant’s property.68 The Court’s
reasoning was grounded in the historical limitations on equity jurisdiction.69 But the
Grupo Mexicano Court distinguished Deckert v. Independence Shares Corp.,70 in
which the Supreme Court upheld a preliminary injunction to preserve assets pending
an action for rescission and restitution. Justice Scalia explained that Deckert was “not
on point” because there “the bill state[d] a cause [of action] for equitable relief.”71
Under Deckert, when a plaintiff’s underlying claims are equitable in nature, a
67Grupo Mexicano de Desarrollo, S.A. v. Alliance Bond Fund, Inc., 527 U.S. 308 (1999).
68Id. at 333.
69Id. at 318.
70Deckert v. Indep. Shares Corp., 311 U.S. 282 (1940).
71Grupo Mexicano, 527 U.S. at 325 (quoting Deckert, 311 U.S. at 288).
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preliminary injunction to preserve a specific res pending final adjudication remains
within the court’s equitable authority.72
The Trust’s claims fall within the Deckert exception. The Eleventh Circuit
addressed the legal or equitable character of fraudulent conveyance actions in
Pettigrew v. Graham (In re Graham).73 There, the court drew a clear line: “the courts
of this country have long held that an action by a creditor or trustee-in-bankruptcy
to set aside a fraudulent conveyance is an equitable action, while an action by a
creditor or trustee-in-bankruptcy seeking money damages is an action at law.”74 The
court classified the trustee’s action as equitable because the trustee sought to set
aside a conveyance of real property—and because, as the court observed, real property
is “not a depreciating asset whose value when returned to the trustee would be
substantially less than its value at the time of the subject conveyance,” making
monetary damages neither appropriate nor adequate.75
This 	framework 	is 	consistent 	with 	the 	Supreme 	Court’s 	analysis 	in
Granfinanciera, S.A. v. Nordberg.76 While Granfinanciera held that a Section 548
action seeking to recover “a determinate sum of money” is a legal claim,77 the Court
endorsed the principle that the legal or equitable determination turns on the nature
of the property transferred. Quoting Glenn’s treatise on fraudulent conveyances, the
72Deckert, 311 U.S. at 289–90.
73Pettigrew v. Graham (In re Graham), 747 F.2d 1383 (11th Cir. 1984).
74Id. at 1387–88.
75Id. at 1388.
76Granfinanciera, S.A. v. Nordberg, 492 U.S. 33 (1989).
77Id. at 46.
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Court explained: “If the subject matter is a chattel . . . an action in trover or replevin
would be the trustee’s remedy; and if the fraudulent transfer was of cash, the trustee’s
action would be for money had and received. . . . If, on the other hand, the subject
matter is land or an intangible, or the trustee needs equitable aid for an accounting
or the like, he may invoke the equitable process.”78
Here, the Trust seeks to avoid transfers that funded Elite Island’s acquisition
of a specific parcel of real property and to recover that property under Section 550.
Under Graham, an action to set aside a fraudulent conveyance of real property is
equitable. Under the Glenn framework endorsed by Granfinanciera, when the subject
matter of the fraudulent transfer is land, the trustee may invoke the equitable
process. Because the Trust’s claims are equitable in nature, the Deckert exception
applies, and Grupo Mexicano does not bar the relief.79
B. This Is Injunctive Relief Under Rule 65, Not Prejudgment
Attachment Under Rule 64
Rule 64 governs the seizure of property “to secure satisfaction of the potential
judgment.”80 It applies when a plaintiff with no claim to specific property seeks to
attach a defendant’s general assets as security for a future money judgment. That is
not what is happening here. The Trust claims an equitable interest in the Overseas
Highway Property itself—property purchased entirely with estate funds, held by a
shell entity, and directly traceable to the transfers the Trust seeks to avoid. When
78Id. at 44 (quoting 1 Glenn, Fraudulent Conveyances and Preferences § 98, at 183–84 (rev. ed.
1940)).
79See Rubin v. Pringle (In re Focus Media Inc.), 387 F.3d 1077, 1085 (9th Cir. 2004); United
States ex rel. Rahman v. Oncology Assocs., P.C., 198 F.3d 489, 498 (4th Cir. 1999).
80Fed. R. Civ. P. 64(a).
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the relief sought is to preserve a specific res pending adjudication of equitable claims,
Rule 65 governs.81
C. No Bond Is Required Under Bankruptcy Rule 7065
Federal 	Rule 	of 	Bankruptcy 	Procedure 	7065 	incorporates 	Rule 	65 	into
adversary proceedings but exempts debtors, trustees, and debtors in possession from
the bond requirement of Rule 65(c).82 The Trust, as the successor to the Debtors’
estates under the confirmed plan of liquidation, is a trustee for Rule 7065 purposes.83
No bond is required.
IV. Preliminary Injunction Standard
To obtain a preliminary injunction, the movant must demonstrate: (1) a
substantial likelihood of success on the merits; (2) that irreparable injury will be
suffered unless the injunction issues; (3) that the threatened injury to the movant
outweighs whatever damage the proposed injunction may cause the opposing party;
and (4) that the injunction would not be adverse to the public interest.84 The movant
bears the burden of persuasion on each factor, and failure to establish any one is
81See Deckert, 311 U.S. at 289–90; Rahman, 198 F.3d at 496–97.
82Fed. R. Bankr. P. 7065.
83 The Trust is the plan-appointed representative of the Debtors’ estates under 11 U.S.C. §
1123(b)(3)(B), vested with authority to prosecute estate avoidance and recovery claims for the benefit
of creditors. See Nordberg v. Sanchez (In re Chase & Sanborn Corp.), 813 F.2d 1177, 1180 n.1 (11th
Cir. 1987). Moreover, the Court need not even decide whether that status alone makes the Trust a
“trustee” within Rule 7065’s bond exception because, even assuming Rule 65(c) applies, the proper
amount of security in this instance is zero. Rule 65(c) requires security only “in an amount that the
court considers proper,” and the Eleventh Circuit recognizes that a court may require no security at
all. BellSouth Telecomms., Inc. v. MCIMetro Access Transmission Servs., LLC, 425 F.3d 964, 971
(11th Cir. 2005).
84Siegel v. LePore, 234 F.3d 1163, 1176 (11th Cir. 2000) (en banc); Levi Strauss & Co. v. Sunrise
Int’l Trading Inc., 51 F.3d 982, 985 (11th Cir. 1995).
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fatal.85 A preliminary injunction does not adjudicate the ultimate rights of the
parties; “the purpose of a preliminary injunction is merely to preserve the relative
positions of the parties until a trial on the merits can be held.”86 A finding of
substantial likelihood of success is not a determination that the movant will prevail;
it is a threshold assessment that the claims are sufficiently meritorious to warrant
preserving the status quo pending full adjudication.87
A. Substantial Likelihood of Success on the Merits
The Trust asserts four fraudulent transfer claims against Elite Island in the
Second Amended Complaint: Count Twenty-Eight (constructive fraud under FUFTA
§ 726.105(1)(b), brought through Bankruptcy Code § 544(b)); Count Twenty-Nine
(constructive fraud under 11 U.S.C. § 548(a)(1)(B)); Count Thirty (actual fraud under
FUFTA § 726.105(1)(a), brought through § 544(b)); and Count Thirty-One (actual
fraud under 11 U.S.C. § 548(a)(1)(A)).
The applicable lookback periods differ. Section 548 reaches transfers made on
or within two years before the Petition Date.88 With a Petition Date of October 10,
2022, Section 548 reaches only transfers made on or after October 10, 2020. Section
544(b), by contrast, permits the trustee to avoid any transfer voidable under
applicable state law by a creditor holding an unsecured claim; the “applicable law”
here is FUFTA, which carries a four-year limitations period.89 The principal August
85Siegel, 234 F.3d at 1176.
86Univ. of Tex. v. Camenisch, 451 U.S. 390, 395 (1981).
87See id.; Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008).
8811 U.S.C. § 548(a)(1).
8911 U.S.C. § 544(b)(1); see Fla. Stat. § 726.110.
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31, 2020 wire falls forty days outside the federal two-year window but is well within
the four-year FUFTA window. As a result, the two FUFTA counts (Twenty-Eight and
Thirty) reach all the Elite Island Transfers, including the principal wire; the two
Section 548 counts (Twenty-Nine and Thirty-One) reach only the subsequent Elite
Island Transfers made on or after October 10, 2020.
Insolvency is an element of the Trust’s constructive fraud counts (Counts
Twenty-Eight and Twenty-Nine) and is a badge of fraud relevant to the Trust’s actual
fraud counts (Counts Thirty and Thirty-One). Because the insolvency analysis is
shared across all four counts, the Court addresses it before turning to each count.
i. Insolvency
The central contested issue at the PI Hearing was insolvency. As described in
Section II.C, three principal sources bear on the question: Mr. Kapila’s balance sheet
analysis, Mr. Gioconda’s probability assessments of VPX’s contingent litigation
liabilities, and the willfulness finding entered against VPX and Owoc in the False
Advertising Litigation. Before applying these to the relevant dates, the Court resolves
a threshold issue: whether Mr. Gioconda is qualified to opine on probabilities of
adverse litigation outcomes, an objection on which the Court reserved at the PI
Hearing.
Mr. Gioconda’s qualification. Federal Rule of Evidence 702 permits expert
testimony where the proffered expert is qualified by knowledge, skill, experience,
training, or education; the testimony rests on sufficient facts or data; the testimony
is the product of reliable principles and methods; and the expert has reliably applied
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those principles and methods to the facts of the case.90 The trial court’s gatekeeping
role is to ensure that expert testimony is both relevant and reliable, and the standard
of reliability is “flexible” when applied to non-scientific expertise.91
Mr. Gioconda has practiced intellectual property litigation for nearly thirty
years, including service as a partner at two major law firms heading their trademark
litigation groups before founding his own firm. He has served as Chairman of the
Board and General Counsel of a beverage industry enterprise built around acquired
intellectual property assets, which involved his direct evaluation of pending and
threatened intellectual property and commercial disputes. He has provided opinions
on litigation risk—including in writing, with quantified probability assessments—to
clients in his ordinary professional practice on a regular basis and has provided
expert testimony on litigation outcomes in connection with attorney malpractice cases
on a number of occasions. His methodology, as he described it, involves identifying
the legal claims asserted, the underlying factual record as it would have been known
or knowable to a reasonable fiduciary at the relevant time, the applicable substantive
law, and the available remedies; arriving at probability ranges grounded in those
inputs; and acknowledging the inherent uncertainty by adopting the lower end of any
range. He cited, as foundational reference material for that approach, ABA published
risk assessment methodology.
90Fed. R. Evid. 702. The Court applies the same Rule 702 framework to non-scientific expert
testimony, with the Daubert reliability factors adapted to fit the discipline. See Kumho Tire Co. v.
Carmichael, 526 U.S. 137, 150–51 (1999); Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 593–
94 (1993).
91Kumho Tire, 526 U.S. at 150; see also United States v. Frazier, 387 F.3d 1244, 1260–62 (11th
Cir. 2004) (en banc).
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The Court has considered the Defendant’s objection. The Defendant does not
contend 	that 	Mr. 	Gioconda 	lacks 	experience 	evaluating 	intellectual 	property
disputes; it contends that he lacks the requisite experience evaluating litigation risk,
and that his probability percentages are subjective judgments rather than the output
of a quantitative model. As to Mr. Gioconda’s experience in this regard, he testified
that he has provided such assessments numerous times to numerous clients. The
Court 	accepts 	this 	testimony 	and 	does 	not 	discredit 	his 	expertise. 	And 	the
Defendant’s observation about the nature of the percentages is accurate, but it does
not disqualify the testimony. Litigation risk assessment is an exercise in informed
judgment rather than mathematical derivation. The reliability question under Rule
702 is whether the expert’s methodology is one a reasonable practitioner would apply,
not whether it produces a single algorithmically determinate answer.92
Defendant suggested at the PI Hearing that Mr. Gioconda’s methodology is
impermissibly 	hindsight 	driven—that 	he 	leveraged 	later 	developments, 	most
prominently the jury’s willfulness finding in the False Advertising Litigation, to
characterize what a reasonable fiduciary would have perceived years earlier. The
objection misunderstands what hindsight bias is and what the methodology calls for.
Litigation risk assessment necessarily evaluates the strength of the underlying
merits as the merits were known and/or knowable at the time of assessment. The
willfulness finding bears on Mr. Gioconda’s 2018 risk assessment not because that
finding existed in 2018, but because the finding is evidence of a fact about 2018:
92See Kumho Tire, 526 U.S. at 152.
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namely, that VPX and Owoc were, at that time, engaged in advertising that was false
or misleading and that they knew was false or misleading or were indifferent to
whether it was false or misleading. The jury’s finding is admissible historical evidence
of a 2018 state of facts; the methodology then asks what a reasonable fiduciary,
looking at those same facts in 2018, would have estimated as the probability of an
adverse outcome. That is not hindsight. It is the routine use of present-day evidence
to find historical fact.
The Court accordingly overrules Defendant’s objection and qualifies Mr.
Gioconda as an expert under Rule 702 on probabilities of adverse litigation outcomes
in 	intellectual 	property 	and 	related 	commercial 	disputes, 	in 	addition 	to 	the
qualifications to which Defendant did not object. The weight to be given to specific
probability figures Mr. Gioconda offered, however, is a separate question, addressed
in the analysis below.
The willfulness finding and the reasonable fiduciary standard. In the Monster
False Advertising Litigation, 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 whether their advertising was false or misleading.”
Applying that instruction, the jury found in favor of Monster on the willful and
deliberate false advertising claim and returned a $271,924,174 verdict. The finding—
that Owoc and VPX knew, or were indifferent to whether, the advertising of Bang
was false or misleading—reaches back in time. To find willful conduct, the jury
necessarily 	found 	that 	Owoc 	had 	the 	requisite 	mental 	state 	at 	the 	time 	the
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advertising was occurring, not at some later moment after Monster filed suit. And
the false advertising, by the jury’s finding, had been ongoing for years.
What follows from that finding is straightforward. A reasonable fiduciary
served with the Monster complaint in September 2018, who knew the advertising of
his enterprise’s flagship product was false or misleading or who was indifferent to
whether it was false or misleading, would not have set a reserve at zero. Such a
fiduciary would have recognized—and owed a duty to recognize—that a substantial
contingent liability was present from the day of the complaint. The precise percentage
that fiduciary would have assigned is not the point. The point is that a reserve of zero,
which VPX maintained throughout the relevant period, is not the posture of a
reasonable fiduciary who had the mental state the jury later found Owoc had.
It is important to note here that the amount of the potential liability would
have been calculated based on the profits of VPX during the time the false advertising
was occurring. Mr. Owoc, as the principal of VPX, is deemed to have been aware of
the profits of his company. Mr. Owoc testified that he had available to him a
multitude of professionals available to assist him in determining the potential
liability.93 A reasonable fiduciary certainly would have done so.
Owoc’s testimony at the PI Hearing—that he believed there was “a 0 percent
chance . . . that we would lose,” and that he therefore set aside no reserve—cannot be
reconciled with the jury’s willfulness finding. A fiduciary who knew the advertising
was false or who was indifferent to whether it was false could not, on any rational
93Hearing Testimony, Apr. 22, 2026 (Owoc testimony).
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view, have sincerely believed there was no chance of losing a litigation challenging
the truth of that advertising. The Court does not credit the 0% figure; it serves only
to diminish Mr. Owoc’s credibility and to illustrate his failure to act as a reasonable
fiduciary in the face of significant litigation exposure.
The Court resolves here the objection on which it reserved at the PI Hearing.
Mr. Owoc's testimony regarding his belief in the studies and his assessment of
litigation risk was admitted not as proof that the studies existed, were reliable, or
established what he represented them to establish, but as evidence of his subjective
state of mind at the relevant time. The Court does not credit that testimony as proof
of the studies' contents or reliability. Whatever subjective belief Mr. Owoc held, a
belief is not a defense when it is irreconcilable — as this one is — with the jury's
finding that he knew or was indifferent to whether the advertising was false.
There is also a more fundamental point regarding that exposure. This was not
inconsequential 	litigation 	that 	simply 	threatened 	the 	Company 	with 	a 	large
judgment; the dispute went to the heart of VPX’s business. Its revenues were
overwhelmingly 	concentrated 	in 	a 	single 	product, 	Bang, 	that 	accounted 	for
approximately 95% of its sales, and that product’s marketing proposition depended
on advertising that the jury would later find was false or misleading and that Owoc
knew was false or misleading or was indifferent to whether it was. That economic
premise underlies Mr. Kapila’s analysis, and it is part of why the contingent liabilities
at issue here are not abstract or speculative. They are tied directly to the engine of
the enterprise.
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The contingent liability framework and the time of transfer issue. Contingent
liabilities occupy a distinctive place in balance sheet insolvency analysis. Because the
obligation has not yet been liquidated, the liability cannot be recognized at full face
value. The accepted methodology, which Mr. Kapila described and the Court accepts
as a starting framework, is to multiply the gross exposure by a probability factor
reflecting the likelihood of an adverse outcome.94 The probability factor is itself a
matter of informed professional judgment rather than mathematical derivation, and
the weight accorded to any specific percentage must be calibrated to reflect that
limitation.
The Defendant’s most important argument on insolvency proceeds from this
point. It correctly observes that contingent liabilities must be measured as of the date
of the challenged transfer based on information available at that time, not at face
value and not with the benefit of hindsight.95 From that premise, Elite Island argues
that Mr. Kapila’s analysis fails to satisfy the time of transfer requirement because he
prepared year-end balance sheets at December 31, 2018, 2019, 2020, and 2021, but
did not prepare a bespoke balance sheet keyed to August 31, 2020 (the date of the
principal Elite Island Transfer) or to any of the carrying cost transfer dates.
94Kapila Depo at 26:1–29:6.
95Defendant relied principally on In re America-CV Station Group, Inc., 666 B.R. 395, 409
(Bankr. S.D. Fla. 2024), at the PI Hearing for the proposition that solvency must be measured at the
time of the challenged transfer based on information then available, and not at face value or with the
benefit of hindsight. The Court accepts that principle, made clear in 11 U.S.C. § 548(a)(1) itself,
which requires that the debtor “was insolvent on the date that such transfer was made or such
obligation was incurred, or became insolvent as a result of such transfer or obligation” 11 U.S.C. §
548(a)(1)(B)(ii)(I).
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The Court accepts the legal premise. Insolvency for fraudulent transfer
purposes is measured as of the date of the challenged transfer, and the measurement
must rest on facts known or reasonably knowable at that time. But the legal premise
does not carry the conclusion the Defendant draws from it. At the preliminary
injunction stage, the Trust does not need to prove insolvency beyond the possibility
of doubt; it need only show a substantial likelihood that the Trust will succeed in
proving insolvency at trial. And on the record presently before the Court, Mr. Kapila’s
methodology 	supplies 	that 	showing 	notwithstanding the 	absence 	of 	a 	bespoke
transfer date balance sheet. He produced two snapshots—year-end 2019 and year-
end 2020—that bracket the principal Elite Island Transfer; both show insolvency;
and he testified that he saw no evidence VPX returned to solvency at any point
between them. Those bookend findings, together with his unrebutted testimony that
solvency was nowhere observed in the intervening period, are sufficient at the
preliminary stage to support an inference that VPX was insolvent in the eight months
that fall inside the bookends. Whether at trial Mr. Kapila will need to perform a more
granular transfer date analysis to prevail under the controlling cases is an issue the
Court does not decide today. The Trust may need more to prevail at trial, but it has
carried its burden at this stage.
The probability figures. The Court qualifies Mr. Gioconda but does not adopt
his specific probability figures wholesale. A single probability number—here, 85% for
the False Advertising Litigation—held constant across the multi-year life of a
complex commercial litigation is difficult to defend mechanically. Litigation risk does
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not proceed that smoothly; it varies based on developments that occur during the
litigation. The Court accordingly treats the Gioconda probability figures as one data
point in the insolvency analysis and not as the determinative finding. The result here
is determined, instead, by the willfulness finding and by the bookend insolvency
described above.
Conclusions on insolvency at each relevant date. With these components in
hand, the Court can address insolvency at each relevant date.
Year-end 2018 and 2019. Mr. Kapila’s year-end 2018 and 2019 balance sheet
deficits are approximately $137.6 million and $150.6 million, respectively. Those
figures reflect the Monster contingent liability alone—recognized at 85% of the gross
claim, per Mr. Gioconda’s factor—and do not include OBI or PepsiCo, neither of which
had yet been initiated. At cross-examination, Mr. Kapila confirmed that for these
years, the insolvency conclusion depends on the contingent liability recognition;
without 	the 	Monster 	contingent 	liability, 	or 	at 	a 	probability 	factor 	below
approximately 50%, VPX would not have been balance sheet insolvent at year-end
2019. That testimony was forthright. But it does not alter the insolvency conclusion.
The 50% floor is significant only if Mr. Gioconda’s 85% is not merely wrong but wrong
by almost half—and the jury’s willfulness finding makes such an aggressive discount
untenable. A reasonable fiduciary in Owoc’s position, who knew the advertising of the
Company’s flagship product was false or misleading or was indifferent to whether it
was, would not have estimated the probability of adverse outcome below 50%. The
Court finds that VPX was insolvent at year-end 2018 and at year-end 2019.
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Year-end 2020 and 2021. For these years, the insolvency conclusion stands
independent of any contingent liability recognition. Mr. Kapila testified, and the
Court finds, that at year-end 2020 VPX’s balance sheet deficit was approximately
$697.6 million, of which approximately $521.5 million was attributable to the three
recognized contingent liabilities combined. Strip out all three contingent liabilities
and VPX’s year-end 2020 insolvency is still approximately $176 million. Similarly, at
year-end 2021, the deficit of approximately $548.6 million reflects approximately
$372.8 	million 	of 	contingent 	liabilities, 	leaving 	approximately 	$176 	million 	of
insolvency independent of any probability assessment. The insolvency conclusion for
these years thus rests on the fair value adjustments themselves—principally the
exclusion of variable interest entity real property assets and the leasehold and
intangibles adjustments—and not on the Gioconda probabilities at all.
July 29, 2020 (the initial wire date) and August 31, 2020 (the principal wire
date). The initial Elite Island Transfer and the principal Elite Island Transfer fall
between Mr. Kapila’s year-end snapshots of December 31, 2019, and December 31,
2020. Defendant correctly notes that Mr. Kapila did not perform a bespoke balance
sheet analysis for those dates. As discussed above, however, that gap does not defeat
the Trust’s showing at the preliminary injunction stage. Mr. Kapila’s year-end 2019
and year-end 2020 analyses both show insolvency; he saw no evidence of intervening
solvency; and the willfulness finding supports the contingent liability recognition that
drives his 2019 deficit. The bookends, together with the unrebutted testimony that
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no evidence of intervening solvency exists, support the inference that VPX was
insolvent on July 29, 2020 and August 31, 2020.
The 	subsequent 	Elite 	Island 	Transfers. 	The 	carrying 	cost 	Elite 	Island
Transfers were made on or after October 2, 2020 and run through October 1, 2022.96
The first two carrying cost transfers fall within the period bracketed by year-end 2019
and year-end 2020; the remaining carrying cost transfers fall within the period
bracketed by year-end 2020 and the Petition Date. VPX was insolvent at year-end
2019, year-end 2020, and the Petition Date. The same bookend reasoning applies, and
the 	year-end 	2020 	deficit—even 	excluding 	all 	contingent 	liabilities—reflects
approximately $176 million of insolvency. VPX was insolvent on each date on which
the carrying cost Elite Island Transfers were made.
Summary. 	For 	these 	reasons, 	the 	Trust 	has 	established 	a 	substantial
likelihood that VPX was insolvent on July 29, 2020, August 31, 2020, on each of the
dates of the subsequent Elite Island Transfers, at year-end 2018 through year-end
2021, and on the Petition Date. The Court’s finding does not depend on a bespoke
August 31, 2020, balance sheet or on adopting Mr. Gioconda’s 85% figure wholesale.
It rests principally on Mr. Kapila’s analysis, the fair value adjustments independent
of any probability assessment, the bookend insolvency findings at year-end 2019 and
year-end 2020, and the jury’s willfulness finding.
96Amended Stipulation ¶¶ 9, 11; Ex. 9.
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Elite Island offered no expert testimony, no accounting analysis, and no
documentary 	evidence 	bearing 	on 	VPX's 	solvency 	at 	any 	relevant 	date. 	The
insolvency record before the Court is accordingly unrebutted.
ii. Count Twenty-Eight: FUFTA Constructive Fraudulent
Transfer
Under FUFTA § 726.105(1)(b), a transfer is fraudulent as to a creditor—
whether the creditor’s claim arose before or after the transfer—if the debtor made the
transfer without receiving reasonably equivalent value in exchange and the debtor
“was engaged or was about to engage in a business or a transaction for which the
remaining assets of the debtor were unreasonably small in relation to the business or
transaction,” or “intended to incur, or believed or reasonably should have believed
that he or she would incur, debts beyond his or her ability to pay as they became
due.”97 Asserted through § 544(b), the claim reaches all of the Elite Island Transfers,
including the July 29 and August 31, 2020 wires.
The transfers. There is no genuine dispute that VPX transferred $9,747,727.82
to or for the benefit of Elite Island in connection with the Overseas Highway Property
between July 29, 2020, and October 1, 2022.98 Each transfer constituted a transfer of
an interest in an asset within the meaning of FUFTA.99
97Fla. Stat. § 726.105(1)(b).
98Amended Stipulation ¶ 11; Ex. 9.
99“Transfer” is defined under FUFTA to mean “every mode, direct or indirect, absolute or
conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an
asset, and includes payment of money, release, lease, and creation of a lien or other encumbrance.”
Fla. Stat. § 726.102(14).
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No 	reasonably 	equivalent 	value. 	The 	record 	establishes 	a 	substantial
likelihood that VPX received nothing of reasonably equivalent value in exchange for
any of the Elite Island Transfers. Title to the Overseas Highway Property vested in
Elite Island, not in VPX.100 Elite Island never made direct monetary payments to
VPX in connection with the transactions at issue.101 There is no documented loan
agreement, promissory note, lease, or other instrument reflecting any obligation of
Elite Island to VPX. And Owoc has admitted that he used the Debtors’ funds to
purchase the Property.102
Unreasonably small capital and inability to pay debts as they came due. As
established in the insolvency analysis above, VPX was insolvent on August 31, 2020,
and 	remained 	insolvent 	throughout 	the 	period 	during 	which 	the 	Elite 	Island
Transfers were made. A corporation whose liabilities exceed the fair value of its assets
by approximately $137 million at the end of 2018, $150 million at the end of 2019,
and $697 million103 at the end of 2020 is, by definition, a corporation engaged in
business “for which the remaining assets . . . were unreasonably small” and one that
should reasonably have believed it would incur debts beyond its ability to pay as they
came due. The two alternative statutory prongs of § 726.105(1)(b) are therefore
satisfied on this record, and the Court need not choose between them for preliminary
injunction purposes.
100 Ex. 18; Amended Stipulation ¶¶ 6–7.
101 Amended Stipulation ¶ 14.
102 Ex. 54, Resp. to Request for Admission No. 165.
103 Even excluding contingent liabilities entirely, VPX’s liabilities exceeded its assets by
approximately $176 million at the end of 2020. Kapila Depo. at 60:10–61:4.
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The Trust has demonstrated a substantial likelihood of success on Count
Twenty-Eight as to all the Elite Island Transfers, including the July 29, 2020 initial
wire, the August 31, 2020 principal wire, and each of the subsequent transfers
detailed in Section II.B.
iii. Count Twenty-Nine: Section 548(a)(1)(B) Constructive
Fraudulent Transfer
Section 548(a)(1)(B) of the Bankruptcy Code permits the trustee to avoid any
transfer made on or within two years before the petition date that was made for less
than reasonably equivalent value, where the debtor (among other alternatives) was
insolvent at the time or became insolvent as a result, was engaged in business for
which its remaining capital was unreasonably small, or intended to incur debts
beyond its ability to pay as they matured.104 The elements of the federal constructive
fraud claim are materially similar to those of FUFTA § 726.105(1)(b), except that
federal 	law 	independently 	recognizes 	balance 	sheet 	insolvency 	as 	a 	sufficient
alternative element.
Because the July 29, August 31, and October 2, 2020 wires fall outside the two-
year lookback, Count Twenty-Nine does not reach those transfers. The count does,
however, reach the subsequent Elite Island Transfers made on or after October 10,
2020. The reasonably equivalent value analysis in Section IV.A.ii applies in full: VPX
received nothing in exchange for any of the post–October 10, 2020 Elite Island
Transfers. As to insolvency, the Court’s analysis in Section IV.A.i applies; VPX was
insolvent on each date on which the carrying cost transfers were made. The Trust has
104 11 U.S.C. § 548(a)(1)(B).
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demonstrated a substantial likelihood of success on Count Twenty-Nine as to the
Elite Island Transfers made on or after October 10, 2020.
iv. Count Thirty: FUFTA Actual Fraudulent Transfer
FUFTA § 726.105(1)(a) permits avoidance of any transfer made with “actual
intent to hinder, delay, or defraud” a creditor.105 Asserted through § 544(b), the claim
reaches all Elite Island Transfers within the four-year FUFTA lookback. Because
direct evidence of fraudulent intent is rarely available, courts evaluate actual intent
through circumstantial evidence known as “badges of fraud.” The statute enumerates
eleven non-exclusive badges.106 Four of them are directly supported by this record:
(a) transfer to an insider; (b) receipt of no reasonably equivalent value; (c) insolvency
at the time of the transfers; and (d) transfer after suit filed or threatened. The
remaining badges are not at issue on this record or do not add independent weight;
the Court does not rely on them.
Transfer to an insider. FUFTA treats as an “insider” of an entity debtor any
director, officer, or person in control of the debtor, and by extension and by settled
case law, an entity that is itself controlled by a statutory insider of the debtor.107 At
105 Fla. Stat. § 726.105(1)(a).
106 Fla. Stat. § 726.105(2). The eleven enumerated badges are: (a) the transfer or obligation was to
an insider; (b) the debtor retained possession or control of the property transferred after the transfer;
(c) the transfer or obligation was not disclosed or was concealed; (d) before the transfer was made or
obligation was incurred, the debtor had been sued or threatened with suit; (e) the transfer was of
substantially all the debtor’s assets; (f) the debtor absconded; (g) the debtor removed or concealed
assets; (h) the value of the consideration received by the debtor was reasonably equivalent to the
value of the asset transferred or the amount of the obligation incurred; (i) the debtor was insolvent or
became insolvent shortly after the transfer was made or the obligation was incurred; (j) the transfer
occurred shortly before or shortly after a substantial debt was incurred; and (k) the debtor
transferred the essential assets of the business to a lienor who transferred the assets to an insider of
the debtor.
107 Fla. Stat. § 726.102(8)(b) (FUFTA definition of “insider”); See Stermer v. Old Republic Nat'l
Title Ins. Co. (In re ATIF, Inc.), 160 F.4th 1124, 1141 (11th Cir. 2025) (“A corporation may qualify as
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the time of the Elite Island Transfers, Elite Island was a single member LLC whose
sole member and manager was Owoc—VPX’s CEO, sole shareholder, and sole
director.108 Elite Island was, accordingly, an entity fully under the control of an
individual who was the very apex of VPX’s corporate structure. It follows that Elite
Island is a non-statutory insider of VPX. Owoc’s denials in response to certain
Requests for Admission regarding his membership in Elite Island109 are contradicted
by the recorded instruments—the Warranty Deed, the Assignment of Development
Rights, and the Dwelling Unit Lock-Out Deed Restriction—each of which identifies
him as “Manager” of Elite Island on the date of acquisition and, in the case of the
Lock-Out Deed Restriction, sixteen months later.110 The insider badge is established.
Receipt of no reasonably equivalent value. For the reasons discussed in Section
IV.A.ii, the Trust has shown that VPX received nothing of reasonably equivalent
value in exchange for any of the Elite Island Transfers.
Insolvency at the time of the transfers. For the reasons discussed in Section
IV.A.i, the Court has found that VPX was insolvent on July 29, 2020, and remained
insolvent throughout the period from October 2, 2020 (the date of the first carrying
cost transfer) through October 1, 2022 (the date of the last carrying cost transfer).
an insider of another corporation by statute or if the two entities share a close relationship. An
example of a close relationship between corporations is when both corporations are under the control
of the same officers and directors.”)
108 Amended Stipulation ¶¶ 1–2; Ex. 54, Resps. to Requests for Admission Nos. 1, 2, 4.
109 Ex. 54, Resps. to Requests for Admission Nos. 17–19.
110 Ex. 18.
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Transfer after suit filed or threatened. At the time of the August 2020 principal
wire, VPX had been a defendant in the False Advertising Litigation for nearly two
years, and the OBI Arbitration had been commenced ten weeks earlier.111 VPX was
thus exposed to litigation carrying, on the record developed at the PI Hearing, a high
probability of a judgment in the hundreds of millions of dollars. For the carrying cost
transfers made on or after October 23, 2020, the Pepsi Arbitration was added to the
litigation picture as well. Each Elite Island Transfer was made against the backdrop
of pending litigation that exposed VPX to hundreds of millions of dollars in contingent
liability.
The concurrence of these four badges—insider status, absence of reasonably
equivalent value, insolvency at the time of the transfers, and pending litigation—
supports a strong inference of actual fraudulent intent for preliminary injunction
purposes.112 The Trust has demonstrated a substantial likelihood of success on Count
Thirty as to all of the Elite Island Transfers, including the July 29, 2020 initial wire,
the August 31, 2020 principal wire, and each of the subsequent transfers.
v. Count Thirty-One: Section 548(a)(1)(A) Actual Fraudulent
Transfer
Section 548(a)(1)(A) of the Bankruptcy Code permits the trustee to avoid any
transfer made on or within two years before the petition date that was made “with
actual intent to hinder, delay, or defraud” any entity to which the debtor was or
111 Kapila Depo at 31:4–24; Hearing Testimony, Apr. 22, 2026 (Gioconda testimony).
112See In re Ramsurat, 361 B.R. 246, 253 (Bankr. M.D. Fla. 2006); In re XYZ Options, Inc., 154
F.3d 1262, 1271 (11th Cir. 1998).
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became indebted.113 Courts applying Section 548(a)(1)(A) use the same badges of
fraud framework that governs the parallel FUFTA actual fraud provision.114 The
analysis in Section IV.A.iv therefore applies to Count Thirty-One as to the Elite
Island Transfers made on or after October 10, 2020. For the reasons already stated,
each of the four badges is present for those transfers. Because the July 29, August
31, and October 2, 2020 wires fall outside the two-year lookback, Count Thirty-One
does not reach those transfers. The Trust has demonstrated a substantial likelihood
of success on Count Thirty-One as to the carrying cost transfers identified in Section
II.B that were made on or after October 10, 2020.
vi. The Defendant’s Distribution Defense
Elite 	Island 	contends 	that 	the 	Elite 	Island 	Transfers 	were 	legitimate
shareholder distributions from a Subchapter S corporation, and that Owoc paid the
corresponding tax. The defense fails for two independent reasons.
First, even taken on its face, the distribution theory does not defeat the Trust’s
claims. A distribution from an insolvent company to its sole shareholder—or to an
entity owned and controlled by that shareholder—for no reasonably equivalent value
is 	precisely 	the 	type 	of 	transaction 	that 	Section 	548(a)(1)(B) 	and 	FUFTA 	§§
726.105(1)(b) are designed to reach. Whether the transfer is styled as a dividend, a
distribution, a bonus, or a loan to a shareholder, the question under FUFTA and §
548 is the same: did the debtor receive reasonably equivalent value? If not, and if the
113 11 U.S.C. § 548(a)(1)(A).
114See In re XYZ Options, Inc., 154 F.3d at 1271; In re Model Imperial, Inc., 250 B.R. 776, 791
(Bankr. S.D. Fla. 2000).
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debtor was insolvent, the transfer is avoidable. The “distribution” label describes how
the Company accounted for the transaction; it does not establish that the Company
received value.
Second, 	and 	more 	fundamentally, 	the 	defense 	misdescribes 	the 	actual
transactions at issue. The “distribution” characterization in VPX’s general ledger is
bookkeeping; the substantive transfers were not, technically speaking, payments to
Owoc. The $8,304,171.78 wire on August 31, 2020 went to the Torrens Law Firm
PLLC closing-agent escrow account, and the property it funded was conveyed by
warranty deed to Elite Island. The carrying cost payments went directly to KMR
Construction, 	Affiniti 	Architects, 	Keys 	Engineering, 	the 	Monroe 	County 	Tax
Collector, and the Florida Keys Aqueduct Authority—each for work or services
benefiting Elite Island’s property. No portion of the Elite Island Transfers was
disbursed to Owoc personally. The transferee of the substantive transactions, in each
case, was Elite Island. Courts evaluating fraudulent transfer claims look to the
substance of the transaction, not the label affixed by the transferor’s accounting.115
The defense does not undermine the Trust’s substantial likelihood of success
on the merits.
B. Irreparable Harm
To establish irreparable harm, the movant must demonstrate an injury that
“cannot be undone through monetary remedies” and that is “neither remote nor
115See Boyer v. Crown Stock Distrib., 587 F.3d 787, 793 (7th Cir. 2009) ("[F]raudulent conveyance
doctrine . . . is a flexible principle that looks to substance, rather than form, and protects creditors
from any transactions the debtor engages in that have the effect of impairing their rights. . .”).
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speculative, but actual and imminent.”116 The Trust has met this burden, for two
related reasons.
First, the Trust’s claims seek to recover a specific parcel of real property. Real
property is unique; no other parcel can be substituted for it, and no money judgment
can make whole a plaintiff who had a right to the particular land itself.117 The Trust’s
equitable interest in the Overseas Highway Property arose at the moment of the
wrongful transfers and is preserved through the Trust’s claims under 11 U.S.C. § 550.
Any encumbrance of the Property with a mortgage would directly and permanently
diminish the Trust’s ability to recover the very property that is the subject of its
equitable claims. The harm is not just the loss of a dollar value that could be made
up with a substitute judgment; it is the loss of the specific res itself.
Second, the threat is concrete and imminent. In the Extension Motion, the
Owocs confirmed their intent to “arrange and close financing” secured by the
Overseas Highway Property. At the TRO hearing on April 2, 2026, Owoc confirmed
on the record that Elite Island had lenders ready, that a loan could close in as little
as two weeks, and that the proceeds would be used to fund litigation defense.118 The
Owocs subsequently filed the Motion for Leave to Obtain Financing to Retain Counsel,
making express what the TRO hearing had already established.119 These are not
116Ne. Fla. Chapter of Ass’n of Gen. Contractors of Am. v. City of Jacksonville, 896 F.2d 1283,
1285 (11th Cir. 1990); Siegel, 234 F.3d at 1176.
117See Henry v. Ecker, 415 So. 2d 137, 140 (Fla. 5th DCA 1982).
118 TRO Order [Dkt. No. 460] ¶ D.
119 Dkt. No. 494.
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speculative assertions; they are admissions by the party opposing the injunction that
the very harm the Trust fears is imminent.
The Property is valued at approximately $8.5 million.120 Elite Island has no
other assets.121 If the Property is mortgaged such that the equity is fully or
substantially consumed, the Trust’s equitable remedy is permanently impaired. That
constitutes irreparable harm.
C. Balance of Hardships
The balance of hardships favors the Trust. On one side, the Trust—and by
extension the creditors of the VPX estate—faces the permanent loss of its equitable
interest in specific real property, which is unique and is the only identified asset
available to satisfy the fraudulent transfer claims against Elite Island. On the other
side, Elite Island faces a temporary restraint on its ability to borrow against the
Overseas Highway Property. Elite Island is a single-asset entity with no independent
operations, no employees, and no ongoing business activities that would be disrupted
by the injunction.
The Court acknowledges that the hardship to Elite Island is not negligible.
Elite Island has retained counsel, but counsel has made clear that his engagement is
for a limited purpose and that he does not intend to represent Elite Island at trial.
Without replacement counsel, Elite Island faces the prospect of being effectively
without representation through trial. A limited liability company cannot appear in
federal court through a non-attorney member or manager; it must be represented by
120 Amended Stipulation ¶ 17; Ex. 1.
121 Amended Stipulation ¶ 8.
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licensed counsel.122 If Elite Island cannot secure trial counsel—because it cannot
access its only asset to fund that retention—it faces the prospect of being unable to
adequately represent itself despite the fact that it has the wherewithal to retain
counsel. Elite Island's inability to secure trial counsel through its own resources is a
genuine hardship, and the Court does not minimize it. The Court takes this hardship
seriously and has addressed it with its financing carveout in the PI Order.123
Elite Island’s interest in funding litigation does not, however, override the
Trust’s equitable interest in preserving the specific Property it seeks to recover. The
injunction 	is 	not 	a 	permanent 	bar; 	it 	preserves 	the 	status 	quo 	pending 	full
adjudication. If the Defendant prevails at trial, the restraint dissolves. On balance,
the hardships favor the Trust.
D. Public Interest
The public interest likewise favors the injunction. The orderly administration
of bankruptcy estates and the protection of creditors’ recoveries are core purposes of
the Bankruptcy Code, and courts have recognized a public interest in preserving
estate property pending adjudication of avoidance claims.124 When a debtor’s property
has been transferred to an insider entity for no consideration while the debtor was
insolvent, and that property is the only identified source of recovery on the claims
122Palazzo v. Gulf Oil Corp., 764 F.2d 1381, 1385 (11th Cir. 1985); Rowland v. Cal. Men’s Colony,
Unit II Men’s Advisory Council, 506 U.S. 194, 201–02 (1993).
123 Dkt. No. 534 (“the Court will consider granting relief from the preliminary injunction to
permit Elite Island LLC to obtain financing secured by the Overseas Highway Property for the
limited purpose of retaining and paying counsel to represent Elite Island LLC in this adversary
proceeding.”)
124See In re Focus Media Inc., 387 F.3d at 1085–86; Rahman, 198 F.3d at 502.
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against 	the 	transferee, 	the 	public 	interest 	in 	preserving 	that 	asset 	pending
adjudication is strong. Creditors of the VPX estate have a substantial interest in the
orderly resolution of these fraudulent transfer claims. Allowing the sole recoverable
asset of Elite Island to be substantially encumbered or dissipated before the claims
are tried would undermine the purposes the Bankruptcy Code is designed to serve.
Accordingly, 	all 	four 	preliminary 	injunction 	factors 	are 	met, 	and 	the
preliminary injunction entered on April 23, 2026, is supported by the findings and
conclusions set forth above.
V. Conclusion
For the reasons set forth in this Opinion, the Court’s entry of the preliminary
injunction on April 23, 2026 is supported by the Trust’s demonstration of: (i) a
substantial likelihood of success on the merits of Count Twenty-Eight (FUFTA
constructive fraud) and Count Thirty (FUFTA actual fraud) as to all of the Elite
Island Transfers, and of Count Twenty-Nine (Section 548(a)(1)(B) constructive fraud)
and Count Thirty-One (Section 548(a)(1)(A) actual fraud) as to the Elite Island
Transfers made on or after October 10, 2020; (ii) irreparable harm in the form of
threatened dissipation of a specific res to which the Trust holds an equitable claim;
(iii) a balance of hardships favoring the Trust; and (iv) a public interest in the orderly
administration of the bankruptcy estate.
# # #
Copies To:
All Parties in Interest.
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