Singh v. Prasad et al
Filing
34
ORDER granting 29 Motion for TRO. See Order for details. Signed by Judge Roy B. Dalton, Jr. on 8/30/2013. (LLM)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
RAMAKANT SINGH,
Plaintiff,
v.
Case No. 6:13-cv-1076-Orl-37KRS
SANJAY PRASAD; and UNIVERSAL
SYSTEM TECHNOLOGIES, INC.,
Defendants.
TEMPORARY RESTRAINING ORDER
This cause is before the Court on the following:
1.
Plaintiff Ramakant Singh’s Emergency Motion for Temporary Restraining
Order and Preliminary Injunction and Supporting Legal Memorandum
(Doc. 29), filed August 28, 2013; and
2.
Prasad’s Response to Ramakant Singh’s Emergency Motion for
Temporary Restraining Order and Preliminary Injunction (Doc. 31), filed
August 31, 2013.
Upon consideration, the Court grants Plaintiff’s motion and institutes a limited temporary
restraining order, for the reasons set forth below.
BACKGROUND
Plaintiff Ramakant Singh is the President and Treasurer of Defendant Universal
System Technologies, Inc. (“UST”). (Doc. 29-1, Singh Aff. ¶ 2.) Defendant Sanjay
Prasad is the Chief Executive Officer and Secretary of UST. (Id., Ex. C, p. 19.) UST is a
closely held corporation, with Singh and Prasad as the only two shareholders and
directors. (Id., Singh Aff. ¶ 2.)
Singh and Prasad are at odds over the ownership and control of the company.
(Id. ¶ 4.) Singh argues that he is the rightful owner of 50% of UST, while Prasad asserts
that he actually owns a 51% majority share. (Doc. 29, pp. 3–4.) On July 11, 2013,
Prasad called a board meeting for the express purpose of removing Singh as President
and Treasurer. (Doc. 29-2, Ex. H, p. 24.) Through counsel, Singh advised Prasad that
the notice of board meeting was defective, and the parties came to a brief detente.
(Doc. 29, pp. 6–7.)
However, on August 21, 2013, Prasad called another board meeting—set for
next Thursday, September 5, 2013—for the purpose of discussing, among other things,
“[o]peration and management of the company during the pending litigation.” (Doc. 29-1,
Ex. C, p. 19.) Singh believes that this meeting is akin to another attempted ouster, as
Prasad will not agree to a meeting of the parties that is not a shareholder meeting, nor
will he agree that no votes will be taken at the meeting. (Doc. 29, pp. 8–9.)
Therefore, Singh filed the instant motion for a temporary restraining order
(“TRO”), asking the Court to prevent the imminent meeting or, in the alternative, to allow
the meeting to proceed but prevent any votes from occurring. (Id. at 1.) Singh also asks
the Court for a preliminary injunction. (Id.) Because both parties had already appeared
in this action at the time that the motion for TRO was filed, the Court granted Prasad
leave to file an expedited response. (Doc. 30.) Prasad argues that Singh will suffer no
irreparable injury because he is actually the one to blame for any mismanagement of
UST. (Doc. 31, pp. 8–12.) Both parties agree that an emergency hearing is
unnecessary. (Id. at 14; Doc. 32.) This matter is now ripe for the Court’s adjudication.
STANDARDS
The Court is authorized to enter a TRO in limited circumstances. See Fed. R.
2
Civ. P. 65(b); Local Rule 4.05. The party seeking relief must demonstrate: (1) a
substantial likelihood of success on the merits; (2) irreparable injury “so imminent that
notice and a hearing on the application for preliminary injunction is impractical”; (3) that
the balance of equities favors the movant; and (4) that the TRO, if issued, will not be
adverse to the public interest. See Local Rule 4.05(b)(2)–(4); see also Haitian Refugee
Ctr., Inc. v. Baker, 950 F.2d 685, 686–87 (11th Cir. 1991); cf. Schiavo ex rel. Schindler
v. Schiavo, 403 F.3d 1223, 1240 (11th Cir. 2005) (discussing the standard in the
preliminary injunction context).
DISCUSSION
Upon review of the parties’ limited briefing and evidence, the Court will allow the
September 5 shareholder meeting to proceed. However, on the present record, Singh
has adequately demonstrated that he could be imminently and irreparably injured by a
vote at the shareholder meeting, such that a TRO is appropriate on that issue.
Therefore, the Court will temporarily restrain any votes from being taken in order to
maintain the status quo.
First, Singh has demonstrated that he is likely to succeed on his claim of judicial
dissolution, given the rancor between the parties and the fierce dispute as to ownership
percentages. Singh points to layoffs made solely on Prasad’s orders (Doc. 29-1, Ex. D,
p. 21) and a letter sent by Prasad to a major client of the company disavowing Singh’s
actions and asserting himself as “the current in-charge” (id., Ex. F, p. 30) as proof that
Singh is likely to succeed on his claim, which is largely predicated on the argument that
the management of the company is hopelessly deadlocked. Prasad’s response does
nothing to disabuse the Court of that notion, as he volleys similar arguments back at
Singh, claiming that Singh is the “only” manager of the company and that he held all the
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“purse strings.” (Doc. 31, pp. 8, 11.) This acrimony demonstrates a likelihood of success
on the claim that the company should be dissolved.
Furthermore, Singh has shown irreparable harm due to Prasad’s repeated
attempts at ouster. The previous July 11 board notice explicitly demonstrates that
Prasad intended to remove Singh from his positions at the company, take charge of the
company’s finances, and make significant hiring and firing decisions without Singh’s
approval. (Doc. 29-2, Ex. H, p. 24.) Though the August 21 board notice is phrased in
cagier language and Prasad’s counsel asserted that “there will be no attempt at the
shareholders meeting on Sept 5 to remove Mr. Singh from any of his current role [sic] in
the company” (Doc. 31-2, Ex. D, p. 16), there remains a distinct possibility of a vote on
other matters important to Singh and the company—which would likely go quite poorly
for Singh given Prasad’s insistence that he is the rightful majority shareholder. (See
Doc. 29-1, Ex. C, p. 19 (referring to “[a]ny other matters of importance to the
company”).) Thus, Singh has established that he could be irreparably harmed by any
impending vote.
For similar reasons, the balance of equities also tips in Singh’s favor as the
(ostensible) minority shareholder. (See Doc. 29, pp. 11–12.) Prasad asserts that any
harm that Singh faces is of his own making because Singh “is in full control of the
corporation, its records, and its assets . . . .” (Doc. 31, p. 11.) The evidence in the record
belies this contention, however, as Prasad has made clear on multiple occasions that
he is the one in charge. (See Doc. 29-1, Ex. D, p. 21; id., Ex. F, p. 30.) As the purported
majority shareholder, the Court finds that the potential harm to Prasad1 in simply
1
Though Prasad asserts that Singh is improperly spending UST’s funds, the
evidence that he points to—Singh paying himself several hundred thousand dollars (for
4
preserving the status quo until a full adversary hearing does not outweigh the potential
harm to Singh in allowing the vote to go forward. Thus, Singh has adequately
demonstrated the third requirement.
Finally, the Court also finds that the public interest will not be adversely affected
by the issuance of this TRO. The TRO is meant merely to uphold the status quo until
the Court can determine the outcome of this matter on the basis of a full and fair hearing
between the parties, which serves the public’s interest in justice.
Therefore, taking together the state of the record at this time, the parties’
demonstrated animosity toward each other, and the serious factual disputes as to the
ownership and control of the company, the Court finds that Singh has sufficiently proven
that he is entitled to a limited TRO. Keeping in mind that a TRO is a serious remedy,
and in the interest of facilitating communication between the parties, the Court will not
enjoin the September 5 shareholder meeting from taking place. However, to keep the
fragile balance intact, the Court will temporarily restrain Prasad from calling any vote in
this or any other shareholder meeting during the pendency of this TRO.
The Court notes that nothing in this Order prevents it from granting or denying
any preliminary injunction in this matter on the basis of fuller briefing and a hearing. This
ruling is made solely on the present record in the interest of preserving the status quo.
what is unclear), lower revenue for UST this year than in past years, paying too much
money for rent, and so on—do not clearly demonstrate that Prasad’s harm in simply
holding off on a vote outweighs Singh’s clearly articulated harm as a minority
shareholder in going forward with one. (See Doc. 31, pp. 8–10.) If Prasad’s assertions
of harm are true and well-supported, that will be a matter to be taken up at the
preliminary injunction stage in the very near future.
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CONCLUSION
Accordingly, it is hereby ORDERED AND ADJUDGED:
1.
Plaintiff Ramakant Singh’s Emergency Motion for Temporary Restraining
Order and Preliminary Injunction and Supporting Legal Memorandum
(Doc. 29) is GRANTED.
2.
Defendant Sanjay Prasad is TEMPORARILY RESTRAINED from calling
any vote on any issue at any UST shareholder or board meetings until
Friday, September 13, 2013.
3.
If Plaintiff seeks to have the temporary restraining order extended, Plaintiff
may move the Court to do so on a showing of good cause. See Fed. R.
Civ. P. 65(b)(2) (“The [temporary restraining] order expires at the time
after entry—not to exceed 14 days—that the court sets, unless before that
time the court, for good cause, extends it for a like period or the adverse
party consents to a longer extension.”).
4.
An expedited hearing will be set by separate notice on Plaintiff’s request
for preliminary injunctive relief and on the pending motion for preliminary
injunction in related case Prasad v. Singh, Case No. 6:13-cv-1158-Orl37KRS. See Fed. R. Civ. P. 65(b)(3).
5.
In its discretion, the Court waives the issuance of a bond at this time, due
to the fact that the record does not demonstrate that Defendant Prasad
will suffer any serious injury in the compressed timeframe between the
consideration of this motion, the shareholder meeting, and the upcoming
preliminary injunction hearing. See Corrigan Dispatch Co. v. Casa
Guzman, S.A., 569 F.2d 300, 302–03 (5th Cir. 1978) (“The amount of
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security required is a matter for the discretion of the trial court; it may elect
to require no security at all.”); see also Johnston v. Tampa Sports Auth.,
No. 8:05-cv-2191-T-27MAP, 2006 WL 2970431, at *1 (M.D. Fla. Oct. 16,
2006). The Court will revisit the matter of a bond at the preliminary
injunction stage, if necessary.
DONE AND ORDERED in Chambers in Orlando, Florida, on August 30, 2013.
Copies:
Counsel of Record
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