GKER LTD v. LLC (2025)

Order, Supreme Court, New York County (Suzanne J. Adams, J.), entered on or about March 28, 2024, which, to the extent appealed from as limited by the briefs, granted plaintiff's motion for a preliminary injunction enjoining defendants from dissipating, paying, or transferring any monies in their possession or that may come into their possession in connection with the sale of condominiums at the property located at 75–77 Clarkson Avenue in Brooklyn;  from releasing any monies, funds, loan repayments, or disbursements to any defendant or anyone else on defendants’ behalf;  and from using any monies or funds of defendant Clarkson BU LLC or monies attributable to the property for any purpose other than for management and expenses of the properties, and for an order of attachment, unanimously reversed, on the law, without costs, the motion denied, and the injunction and attachment order vacated.

Plaintiff failed to demonstrate a likelihood of success on the merits, irreparable harm, and a balance of equities in its favor (see Nobu Next Door, LLC v. Fine Arts Hous., Inc., 4 N.Y.3d 839, 840, 800 N.Y.S.2d 48, 833 N.E.2d 191 [2005];  McBride v. KPMG Intl., 135 A.D.3d 576, 580, 24 N.Y.S.3d 257 [1st Dept. 2016]).  Although plaintiff raised some questions about entries in Clarkson BU's financial records and tax returns, Clarkson BU presented significant evidence that the loans were legitimate.

Plaintiff seeks as damages the amount of its investment and any profit on that investment.  The availability of quantifiable money damages precludes a finding of irreparable harm (see Kingsbridge 2005, LLC v. Wells Fargo Bank, 226 A.D.3d 620, 621, 209 N.Y.S.3d 390 [1st Dept. 2024];  J.S.I.K. Intl. LLC v. Schuster, 225 A.D.3d 472, 473–474, 207 N.Y.S.3d 64 [1st Dept. 2024]).  Moreover, Supreme Court based its finding of irreparable harm on a potential foreclosure on the property by a mortgagor;  however, the Clarkson BU defendants state that there is no mortgage on the property or risk of foreclosure and plaintiff did not dispute that there was no remaining mortgage on the property.

Plaintiff did not demonstrate a likelihood of success on the merits.  Therefore, the order of attachment should be reversed, as a likelihood of success on the merits is necessary to obtain an order of attachment (CPLR 6212;  Genger v. Genger, 152 A.D.3d 444, 445, 55 N.Y.S.3d 658 [1st Dept. 2017]).  Moreover, CPLR 6201(1) requires a showing that the defendant is a nondomiciliary residing without the state or a foreign corporation not qualified to do business in the state, and plaintiff must show a basis for attachment as to the particular defendant whose property is subject to the attachment (VisionChina Media Inc. v. Shareholder Representative Servs., LLC, 109 A.D.3d 49, 59–61, 967 N.Y.S.2d 338 [1st Dept. 2013]).  The Israel-based defendants Eran Reisfeld, Ran Oron, and Gili Haberberg have not appeared, and their property is not the subject of the attachment order.  Rather, the attachment order applies only to the property of Clarkson BU, a New York entity.

Plaintiff did not submit sufficient proof that defendants acted fraudulently with respect to Clarkson BU so as to warrant issuance of an attachment (CPLR 6201[3]).  It is not sufficient that affidavits in support of an attachment contain allegations raising a suspicion of an intent to defraud (see Mitchell v. Fidelity Borrowing LLC, 34 A.D.3d 366, 366–367, 827 N.Y.S.2d 107 [1st Dept. 2006]).