Judge Joanna Seybert
Gateway provided SB Max Global financing for two purchase orders (POs)—including purchase of fabric—for garments to be provided to Ross Stores Inc. SB Max defaulted on its POs, to be fulfilled with garments made by Guatemala’s Beltlan SA. A deal was brokered under which Reign Blue Corp. would buy the unpaid for garments from Beltlan, and provide them to Ross under new POs. Reign Blue obtained financing from Korea’s Michelle Kookje Corp. (Michelle). Gateway’s UCC-1 statement named Reign Blue its debtor, on the ground Reign Blue took over SB Max’s POs as a successor in interest, thereby benefitting from the POs and Gateway’s financing while SB Max did not pay. Overruling Reign Blue’s objections, the court adopted a magistrate judge’s recommendation that it be denied preliminary injunctive relief terminating the UCC-1 filing. Reign Blue’s argument that it showed irreparable harm because it would likely go out of business absent an injunction was speculative. Although temporarily unable to conduct business with Ross, Reign Blue did not show that it could not resume their business relationship. Nor did Reign Blue provide evidence that Michelle would refuse to continue financing Reign Blue.
