FILED: NEW YORK COUNTY CLERK 10/04/ :48 PM INDEX NO /2017 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 10/04/2017
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1 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK x PETER R. GINSBERG LAW LLC, Plaintiff, v. SOFLA SPORTS LLC, Defendant x Case No. Plaintiff PETER R. GINSBERG LAW LLC ( Plaintiff ), by its undersigned counsel, submits this Memorandum of Law in Support of its Motion for a Temporary Restraining Order ( TRO ), Preliminary Injunction ( PI ) and Permanent Injunction against Defendant SOFLA SPORTS LLC ( Defendant or SOFLA ). PRELIMINARY STATEMENT Plaintiff provided legal services to Defendant and related companies and individuals. Plaintiff attempted, without success, to collect more than $250,000 in legal fees Defendant owes to Plaintiff for its services. The total amount of fees owed to Plaintiff (including fees owed by related companies and individuals) is at least three times that amount. In this action, Plaintiff seeks, in pertinent part, to enjoin Defendant from using, transferring, assigning, encumbering, disposing of or otherwise dissipating assets that could be used to satisfy Defendant s obligations to Plaintiff. Plaintiff has a secured lien / UCC 1 filing on all assets of Defendant in the amount of $250,000 plus interest at the rate of 10%. Defendant has ignored all notices and demands and refused over the course of well over a year to satisfy its obligations. Defendant has contended that it cannot satisfy its obligations. 1 1 of 7
2 However, when Defendant has received or controlled funds that would be more than sufficient to satisfy its debt to Plaintiff, it has distributed funds to SOFLA executives, personnel and others associated with SOFLA instead of satisfying its debt to Plaintiff. Defendant is expected to receive certain fees and commissions from its professional sports clients exceeding one million dollars between October 15, 2017 and December 31, Nonetheless, Defendant has refused to pledge or commit to using those funds to satisfy its financial obligations to Plaintiff. Plaintiff fears that, when the fees and commissions are received, Defendant will distribute or otherwise dissipate its assets once again, leaving the LLC void of assets and leaving Plaintiff with a worthless security interest. Plaintiff requires immediate injunctive relief to enjoin Defendant and its representatives from using, transferring, assigning, encumbering, disposing of or otherwise dissipating its assets, and to enjoin Defendant and its representatives from attempting to convert Plaintiff s security. Otherwise, Plaintiff faces an immediate, catastrophic loss. ARGUMENT A TRO is an interim order entered in an action upon a summary showing of its necessity to prevent immediate and irreparable injury pending a full hearing to determine the parties rights. See New York Civil Practice Law and Rules The purpose of a temporary restraining order is to preserve an existing situation in status quo until the court has an opportunity to pass upon the merits of the demand for a preliminary injunction. Warner Bros. Inc. v. Dae Rim Trading, Inc., 877 F.2d 1120, 1125 (2d Cir. 1989) (citation omitted). This is a situation where injunctive relief is essential. 2 2 of 7
3 The standard for granting a TRO and PI are identical and well established. AIM Intern. Trading LLC v. Valcucine SpA., 188 F. Supp. 2d 384, (S.D.N.Y. 2002). In order to obtain such relief, the movant must show (a) irreparable harm and (b) either (1) likelihood of success on the merits or (2) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly toward the party requesting the preliminary relief. Id. at 387 (quoting Jackson Dairy, Inc. v. H.P. Hood & Sons, Inc., 596 F.2d 70, 72 (2d Cir. 1979)). The decision to award a TRO or PI rests in the sound discretion of the district court. Id. The facts and circumstances of this case demonstrate conclusively that Plaintiff is entitled to a TRO and preliminary injunctive relief to enjoin Defendant and its representatives from using, transferring, assigning, encumbering, disposing of or otherwise dissipating its assets, and to enjoin Defendant and its representatives from attempting to convert Plaintiff s security. I. PLAINTIFF WILL SUCCEED ON THE MERITS OF ITS CLAIMS In this action, Plaintiff seeks a Declaratory Judgment. The Declaratory Judgment Act provides that, [i]n a case of actual controversy within its jurisdiction... any court of the United States... may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. 28 U.S.C. 2201(a). A case of actual controversy exists if the dispute is (i) definite and concrete, touching the legal relations of parties having adverse legal interests ; (ii) real and substantial ; and, (iii) amenable to specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts. MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007) (citation omitted). Basically, the question in each case is whether the facts alleged, under all the circumstances, show that there is a substantial 3 3 of 7
4 controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment. Id. There exists an immediate and substantial controversy between the parties, as evidenced by Defendant s refusal to satisfy its financial obligations to Plaintiff, by Defendant s history of ignoring all notices and demands for payment from Plaintiff, and by Defendant s history of dissipating assets that should have been used to satisfy its debt to Plaintiff. This controversy necessitates the issuance of a judgment declaring that Defendant owes Plaintiff $250,000 plus interest at the rate of 10% and that Plaintiff owns Defendant s assets until Plaintiff s lien is satisfied. The facts also establish that Plaintiff is entitled to a judgment in its favor. There can be no dispute that Plaintiff provided legal services to Defendant or that Defendant owes legal fees to Plaintiff totaling at least $250,000. Plaintiff has a secured lien / UCC 1 filing on all assets of Defendant in the amount of $250,000 plus interest at the rate of 10%. Accordingly, Plaintiff is likely to succeed on its claim seeking a judgment declaring that Defendant owes Plaintiff $250,000 plus interest at the rate of 10% and that Plaintiff owns Defendant s assets until Plaintiff s lien is satisfied. II. PLAINTIFF WILL SUFFER IRREPARABLE HARM IF A TRO IS NOT ISSUED As noted above, Plaintiff provided legal services to Defendant and related companies and individuals for many years, and the total amount of fees owed to Plaintiff (including fees owed by related companies and individuals) is at least $750,000, a significant portion of Plaintiff s receivables at relevant times. Although the injury that Plaintiff faces may appear to be purely economic, it constitutes irreparable harm, because, for a law firm composed of three attorneys and an administrative 4 4 of 7
5 assistant, such amount constitutes a significant and material portion of its receivables, necessary to operate its business. See Nat l Ass n of Mortg. Brokers v. Bd. of Governors of Fed. Reserve Sys., 773 F. Supp. 2d 151, 182 (D.D.C. 2011) ( Although [plaintiffs] face purely economic injury, they sufficiently assert that this injury will result in the complete destruction of their business, which certainly constitutes irreparable harm ); see also Stanley-Fizer Assocs., Inc. v. Sport-Billy Prods. Rolf Deyhle, 608 F. Supp. 1033, 1035 (S.D.N.Y. 1985) (citations omitted) ( A loss of business that is commercially life-threatening can constitute irreparable harm and can warrant a grant of a [TRO] ). Defendant will have the financial means to pay $250,000 plus interest at the rate of 10% in order to satisfy its debt to Plaintiff. Defendant is expected to receive fees and commissions from its professional sports clients exceeding one million dollars between October 15, 2017 and December 31, Unless Defendant, which has a history of ignoring its obligations to Plaintiff and diverting and otherwise distributing its assets rather than satisfying its obligations, is enjoined from dissipating these assets, Plaintiff will be unable to collect any portion of the legal fees owed to it by Defendant and related companies and individuals, because the other companies and individuals who owe legal fees to Plaintiff are financially unable to satisfy their obligations. The amount owed by Defendant and related companies and individuals, totaling at least $750,000, is a significant portion of Plaintiff s receivables. Because Plaintiff will suffer irreparable harm in the absence of the requested restraining orders, this Court should grant the relief requested. 5 5 of 7
6 III. THE BALANCE OF EQUITIES FAVORS PLAINTIFF AS DEFENDANT WILL NOT SUFFER ANY HARM AS A RESULT OF A TRO The balance of hardships heavily favors granting a TRO. Without such relief, Defendant will once again dissipate its assets, as it has done in the past, which, in turn, will prevent Plaintiff from collecting legal fees it is owed and which constitute a significant portion of Plaintiff s receivables. This would jeopardize Plaintiff s business. On the other hand, Defendant would suffer no hardship from being enjoined from dissipating assets which Plaintiff has rightfully earned and which Defendant indisputably owes. CONCLUSION For all of these reasons, Plaintiff respectfully submits that the Court grant Plaintiff s request for a Temporary Restraining Order and issue the proposed Temporary Restraining Order and Order to Show Cause Why Further Injunctive Relief Should Not Issue. Dated New York, New York October 4, 2017 PETER R. GINSBERG LAW, LLC By _/s/ Peter R. Ginsberg_ Peter R. Ginsberg 80 Pine Street, 33rd Floor New York, NY (646) pginsberg@prglaw.com Attorney for Plaintiff 6 6 of 7
7 CERTIFICATION OF SERVICE I hereby certify that on October 4, 2017, the foregoing document was electronically served on Defendant SOFLA SPORTS LLC ( Defendant ) via and electronically filed with the Clerk of the Court using CM/ECF. /s/ Peter R. Ginsberg Peter R. Ginsberg, Esquire 7 7 of 7
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