Injunctive Relief Freezing Defendant's Assets Requires More Than Suspicion: This Week in Scott Mollen's Realty Law Digest
Scott Mollen discusses "Conlon Holdings LLC v. Chanos & Company" which illustrates that "courts are reluctant to grant prejudgment injunctions based on mere allegations by a claimant that a defendant or respondent intends to dissipate assets."
September 03, 2024 at 11:42 AM
13 minute read
Contractual DisputesBreach of Contract—Breach of Fiduciary Duties—Injunction in Aid of Arbitration Denied—Motion To Enjoin Transfer of Proceeds From Sale of Miami Home Denied—Motion for Appointment of Receiver Denied—Petitioners Failed To Demonstrate by "Clear and Convincing Evidence That There is a Danger of Irreparable Loss and Damage" or That Assets Were Being "Diverted or Wasted"—Petitioners Claimed That Respondents Will "Abscond, With Monies" Absent Judicial Relief and Render "Any Relief From a Successful Arbitration as Ineffectual"—Court Was "Unpersuaded" That Petitioners Were Likely To Prevail on the Merits in Their Arbitration—Failure To Establish Irreparable Injury and To Demonstrate a Balance of Equities in Petitioners' Favor—Promissory Estoppel Claim Denied
This decision arises from petitioners' motion for a preliminary injunction enjoining respondents from "transferring the proceeds of the sale of the property located at … Miami Beach, Florida (Miami residence)," removing a general partner from a limited partnership, barring the general partner from holding that position in the future absent agreement by a "majority of disinterested partners" and for appointment of a temporary receiver "until such time that the non– interested partners vote to appoint a new general partner."
The petitioners sought injunctive relief to aid a pending arbitration, "in which petitioners … seek recovery from respondents … for breach of contract and breach of fiduciary duty, among other claims." The petitioners claimed that the respondents will "abscond with monies" absent injunctive relief and that would "render any relief from a successful arbitration as ineffectual."
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