Eugene Stearns already convinced one court to reverse a gigantic trial loss for his client BankAtlantic Bancorp. Can the Stearns Weaver Miller Weissler Alhadeff & Sitterson partner do it again?

On Monday Delaware Chancery Court vice chancellor Travis Laster permanently enjoined BankAtlantic from closing on a planned sale of $2.1 billion in loans and $3.3 billion in deposits to BB&T. A group of indentured trustees and investors holding trust preferred securities had sued to prevent the sale, claiming it would allow BB&T to “cherry-pick” BankAtlantic’s assets and leave the bank holding only troubled and foreclosed loans. Laster concluded that the deal would breach BankAtlantic’s contracts with the investors and cause the bank to default on its obligations.

“The ensuing event of default will result in the debt accelerating,” Laster wrote. “Bancorp cannot pay the accelerated debt. Because this eventuality will inflict irreparable harm on the plaintiffs, I have entered contemporaneously an order permanently enjoining Bancorp from consummating the sale.”

Jonathan Pickhardt of Quinn Emanuel Urquhart & Sullivan launched the suit in November on behalf of Hildene Capital Management LLC and took the lead for the plaintiffs during trial in January. He hailed the decision as a “terrific victory” and a confirmation of the sanctity of contracts, even during times of financial distress. “This hopefully closes [this type of deal] as a potential avenue for other banks to consider,” Pickhardt said.

Reached Monday afternoon, Stearns noted that BankAtlantic’s trust preferred securities took a 12 percent hit on the news of Monday’s decision. That, he said, showed that the market saw the BB&T deal as the “preferable situation” for BankAtlantic. The deal had been scheduled to close as early as March 1. “In our view, everybody’s interest was served in approving this transaction,” he said.

BB&T, which was not a party in the suit, said in a statement that it was “very disappointed that the ruling is not in favor of BankAtlantic.” It added: “We hope BankAtlantic can reach a resolution with their investors.”

BankAtlantic had argued that the sale would leave behind assets with a net book value of $623.6 million–far more than the $333 million held by investors in outstanding trust-preferred securities. But Vice Chancellor Laster sided with Hildene and indentured trustees Wells Fargo Bank (represented by Arent Fox) and Wilmington Trust Company (represented by Seward & Kissel) in concluding that the deal would breach contractual guarantees for repayment on the plaintiffs’ debt securities and fundamentally change the nature of the bank holding company’s operations.

“After the Sale Transaction, Bancorp will own 100% of an entity with no brand, no banking franchise, no deposit base, no branches, eight current employees, and a portfolio of criticized assets,” Laster wrote. “It is difficult to imagine a transaction that would have a greater qualitative impact on Bancorp.”

BankAtlantic argued at trial that an injunction could lead to its failure as an entity, according to the decision. In a statement issued Monday, CEO Alan Levan said the bank will “continue to operate in its normal course” as it considers how to respond to the ruling. “This order is an obvious setback to a transaction we believed and continue to believe to be in everyone’s best interests,” Levan said.

Stearns of Stearns Weaver told us BankAtlantic could either appeal to the state’s highest court, restructure the transaction, or seek another buyer. “We’re addressing those issues as we speak,” he said. If Stearns does somehow persuade the Delaware Supreme Court to revive the deal, it’ll be an even bigger turnaround for BankAtlantic than he pulled off last year. In April Stearns convinced a federal district court judge in Miami to throw out a jury verdict in a securities class action over the bank’s loan portfolio.