In an August 15, 2011 decision by Justice Driscoll, the court denied the plaintiff’s motion for a preliminary injunction to preclude the defendants from using the assets belonging to a general partnership, of which the parties were all partners, to pay the legal fees the defendants incurred in the litigation. The partnership owned a gold club. The plaintiffs alleged that the defendants gave out free “special memberships” to the golf club for his personal benefit, and allowed members of another club to use the partnership’s golf club without paying any costs or expenses, which caused the club to lose significant revenue. The court denied the preliminary injunction upon concluding that the plaintiff could not establish a likelihood of success on the merits of it breach of fiduciary duty claim. Specifically, the court found that the partnership agreement authorized the defendant, as the managing general partner of the partnership, to control the partnership and the plaintiff failed to demonstrated that the defendant lacked authority to issue the special memberships. The court also found that there was a factual dispute as to whether the defendants personally benefitted from awarding the special memberships, which required denial of the preliminary injunction. The court further found that a preliminary injunction was not warranted because the harm the plaintiffs suffered was compensable by monetary damages, which did not constitute irreparable harm necessary to obtain a preliminary injunction.
Katz v Biel, Sup Ct, Nassau County, August 15, 2011, Driscoll, J, Index No. 600510-11