Wareh v. Lesperance

Filing 25

MEMORANDUM OPINION AND ORDER. The foregoing constitutes the Court's Findings of Fact and Conclusions of Law. The Court has considered all of the arguments of the parties. To the extent not specifically addressed above, the parties' arguments are either moot or without merit. The plaintiff's motion for a preliminary injunction is denied. SO ORDERED. (Signed by Judge John G. Koeltl on 9/29/2016) (rjm)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
────────────────────────────────────
16-cv-06210(JGK)

RASHAD WAREH,
Plaintiff,

MEMORANDUM OPINION AND
ORDER

- againstDAVID S. LESPERANCE,
Defendant.
JOHN G. KOELTL, District Judge:
This is a dispute between the two general partners to the
Starnberg Investment Group (“Starnberg”), a general partnership
with an unusual business purpose: helping foreign nationals
obtain Polish citizenship by investing in an insolvent Polish
distillery, which would purportedly facilitate the grant of
Polish citizenship pursuant to a citizenship fast track program
created by the office of the Polish President. The scheme failed
and no client has received citizenship. The general partners --Rashad Wareh, the plaintiff, and David S. Lesperance, the
defendant --- agree that they should wind down Starnberg, and
have agreed in principle to sell Starnberg’s assets to a thirdparty investment firm, Impression Invest, S.A. (“Impression”).
However, the parties disagree on the post-sale destination of
the proceeds, which, pursuant to the sale contract with
Impression, is currently slated to be a Cypriot deposit account

under the defendant’s control. The plaintiff claims that the
defendant will abscond with the proceeds and otherwise cheat him
unless there is judicial intervention.
Pending before the Court is the plaintiff’s application for
a preliminary injunction pursuant to Rule 65 of the Federal
Rules of Civil Procedure to enjoin the defendant, absent the
plaintiff’s consent, from: (i) opening the deposit account that
would serve as the post-sale destination of the proceeds
pursuant to the sale contract with Impression; (ii) disbursing
the proceeds of the sale; and (iii) taking any other actions on
behalf of Starnberg.1
The plaintiff is a citizen of New York. The defendant is a
citizen of Canada currently residing in Poland. The Court has
jurisdiction pursuant to 28 U.S.C. § 1332(a)(2).
On August 4, 2016, the plaintiff sought a temporary
restraining order (“TRO”), along with the preliminary
injunction, seeking the same relief described above. On August
9, 2016, the Court held a hearing on the request for a TRO and
denied the request, concluding that the plaintiff had not made

1

The Complaint also asserts claims against the defendant seeking
(i) a declaratory judgment clarifying the parties’ rights under
the Starnberg partnership agreement; (ii) specific performance
ordering the defendant to take no unilateral actions adverse to
the plaintiff in connection with Starnberg; (iii) an accounting
of Starnberg assets; and (iv) damages for breach of contract and
fiduciary duties. These claims are not presently before the
Court.
2

the requisite showing of immediate and irreparable harm or of a
likelihood of success on the merits. See Dkt. 14. On September
26, 2016, the Court heard oral argument on the plaintiff’s
motion for a preliminary injunction. The request for a
preliminary injunction is denied.
I.
The following facts are based on the parties’ submissions
in connection with the TRO and the preliminary injunction.
The defendant is a Canadian lawyer licensed to practice in
the province of Ontario who specializes in assisting high net
worth foreign clients obtain citizenship in other countries.
Lesperance Decl. ¶ 1. The plaintiff is a New York lawyer
admitted to practice in New York, Virginia, and Washington, DC.
Wareh Decl. ¶ 1.
In October 2012, an individual represented by the plaintiff
asked the plaintiff to contact the defendant to help obtain
Polish citizenship. Wareh Decl. ¶ 2. The plaintiff had other
clients with a similar interest. Wareh Decl. ¶ 5. The defendant
already represented a group of individuals who also desired
Polish citizenship. Wareh Decl. ¶ 5. To advance the interests of
their respective clients, in May 2013, the defendant and the
plaintiff decided to form a general partnership, Starnberg.
Wareh Decl. ¶ 11; Lesperance Decl. ¶ 9; see also Wareh Decl.,
Ex. 3 (Starnberg Partnership Agreement) ¶ 2.

3

Starnberg is headquartered in Ontario, Canada, and its
internal affairs are governed by a partnership agreement, which
includes an Ontario choice-of-law provision. Wareh Decl., Ex. 3
¶¶ 1, 9. The agreement grants the defendant and the plaintiff
mutual power of attorney rights --- the scope of which is
disputed --- to act on behalf of Starnberg. Wareh Decl., Ex. 3 ¶
5; see also Wareh Decl. ¶¶ 13-14; Wareh Supp. Decl. ¶¶ 3-4;
Lesperance Decl. ¶¶ 11, 31. The agreement states that the
defendant has “the primary responsibility for monitoring . . .
loans” and for providing the plaintiff with partnership status
reports and loan information. Wareh Decl., Ex. 3 ¶ 4. The
parties agree that client confidentiality is of paramount
importance because their clients could be subject to reprisals
in their home countries if it became public that their clients
were seeking foreign citizenship. Wareh. Supp. Decl., Ex. 29;
Lesperance Decl. ¶¶ 1, 5.
The scheme the parties devised was as follows. The
defendant negotiated a “fast-track citizenship for investment”
program with the office of the Polish President (at the time,
former President Bronisław Komorowski) pursuant to which foreign
applicants for Polish citizenship would gain preferential
treatment in exchange for lending money to a struggling Polish
business. Wareh Decl. ¶ 4; Lesperance Decl. ¶ 2; see also Wareh
Decl., Ex. 2 (e-mail from defendant describing scheme and

4

stating that no official documentation of the program exists).
Pursuant to individual retainer agreements with the defendant’s
law firm and investment agreements with Starnberg, each of the
Starnberg clients originally represented by the plaintiff loaned
on average around $625,000 to Starnberg, with their loans
secured by Starnberg’s assets.2 Wareh Decl. ¶¶ 7, 15; Lesperance
Decl. ¶ 6; Wareh Decl., Ex. 1 (Client Retainer Agreement); Wareh
Decl., Ex. 4 (Individual Investment Agreement with Starnberg).
Starnberg loaned the funds to Szczecińska Fabryka Wódek sp. z o.
o. (“Starka”), a special purpose vehicle owned and controlled by
the defendant’s wife, a Polish citizen.3 Wareh Decl. ¶ 10;
Lesperance Decl. ¶ 3; Wareh Decl., Ex. 5 (Loan Agreement Between
Starnberg and Starka). Starka in turn was to use the loans to
acquire and operate SWW Polmos (“Polmos”), an insolvent
distillery in Poland. Wareh Decl. ¶¶ 4, 10, 17; Lesperance Decl.
¶¶ 12-13.
The parties intended that the Starnberg client loans would
be repaid through operating profits or asset sales. Wareh Decl.
¶ 15; Lesperance Decl. ¶ 12. The defendant would receive a
2

It is unclear how much, if anything, the Starnberg clients
originally represented by the defendant have loaned to
Starnberg.
3
Starka was originally named Agora PPUH sp. zo. o. Wareh Decl. ¶
10. For convenience, the entity is referred to only as Starka in
this Memorandum Opinion and Order. In 2014, the ownership
interest in Starka was transferred to Yasmia Ltd., a Cypriot
entity also controlled by the defendant’s wife. Wareh Decl. ¶
18; Lesperance Decl. ¶ 16.
5

success fee from each of Starnberg’s clients upon the grant of
citizenship. Wareh Decl. ¶ 7; Wareh Decl., Ex. 1 at 2. The
plaintiff received legal fees as part of his continued
representation of his clients. Wareh Decl. ¶ 6.
Starka acquired Polmos, but Polmos never began commercial
operations. Wareh Decl. ¶ 17; Lesperance Decl. ¶ 17. Since 2013,
the parties have been attempting to sell Starka in order to
recoup client loans. Lesperance Decl. ¶ 15. In May 2015, former
President Bronisław Komorowski lost his reelection bid to the
current President of Poland, Andrzej Duda. Lesperance Decl. ¶
14. The defendant did not believe that President Duda, based on
President Duda’s party platform, would continue the citizenship
for investment program. Lesperance Decl. ¶ 14. The parties
accordingly redoubled their efforts to wind down Starnberg in
order to repay the loans. Wareh Decl. ¶ 27; Lesperance Decl. ¶
15; Lesperance Decl., Ex. A. In September 2015, the defendant
moved to Poland to oversee efforts to sell Starka. Lesperance
Decl. ¶ 21.
At this point, the relationship between the plaintiff and
the defendant rapidly deteriorated. Communication between the
two became more infrequent and the plaintiff began to suspect
that the defendant would misappropriate partnership assets.
Wareh Decl. ¶¶ 26-28; see also Wareh Supp. Decl., Ex. 25.

6

In November 2015, the plaintiff, on behalf of Starnberg and
without informing the defendant, retained Polish counsel to file
enforcement actions in Polish court against Starka to recoup
client loans. Wareh Decl. ¶ 27; Wareh Supp. Decl. ¶ 18; Wareh
Supp. Decl., Ex. 21 (Feb. 19, 2016 Polish Court’s Decision);
Lesperance Decl. ¶¶ 22-23, 26-28. The enforcement actions
garnered the attention of the Polish prosecutor’s office, which
initiated a criminal investigation into Starka. Wareh Supp.
Decl. ¶ 15; Wareh Supp. Decl., Ex. 22 (The Polish Prosecutor’s
Procedural Pleading). On January 8, 2016, upon learning about
the enforcement actions and without informing the plaintiff, the
defendant represented to the Polish court that he had power of
attorney over Starnberg and attempted to withdraw the
enforcement proceedings. Wareh Decl. ¶ 28; Wareh. Supp. Decl. ¶
13; Wareh. Supp. Decl., Ex. 20 (Lesperance’s Motion to
Withdraw). The plaintiff demurred and told the defendant that he
thought that the defendant was misconstruing the power of
attorney, demanded that the defendant stop acting unilaterally,
and threatened legal action. Wareh Decl. ¶¶ 22-25, 28; Wareh
Supp. Decl., Ex. 25. Likewise, the plaintiff noted that several
clients had threatened legal action against the plaintiff
himself to recover their loans. Wareh Supp. Decl., Ex. 25.
Also around that time, the plaintiff discovered that the
defendant had assigned to a bank a security interest in

7

Starnberg assets superior to that of Starnberg’s clients. Wareh
Decl. ¶ 25; Lesperance Decl. ¶¶ 17-19. The plaintiff was
incensed that he had not been consulted previously about that
decision, which he viewed as yet another instance of the
defendant disregarding his obligations under the Starnberg
partnership agreement. Wareh Decl. ¶ 25.
In early 2016, after several unsuccessful rounds of
negotiations with potential buyers --- including one in which
Wareh sent a letter to Impression (an investment firm interested
in purchasing Starka) accusing Lesperance of misrepresenting
facts to Impression, see Wareh Supp. Decl. ¶ 20; Lesperance
Decl., Ex. E4 --- the parties discussed taking formal steps to
improve their fraying relationship. See Wareh Decl. ¶¶ 29-30. To
reassure the plaintiff, a lawyer for the plaintiff, Katherine
Toomey, was appointed as a director to the board of Starka.
Wareh Decl. ¶ 31; Wareh Decl., Ex. 7. The defendant told the
plaintiff that he would amend Starka’s organizational documents
so that the defendant could not unilaterally remove Ms. Toomey
from Starka’s board, but the defendant never actually amended
Starka’s organizational documents. Wareh Decl. ¶ 31. The parties
also discussed amending the Starnberg partnership agreement,

4

The documents somewhat confusingly refer to Impression as
“Polmos.” See, e.g., Lesperance Decl., Exs. E, I. However, in
their declarations and papers, the parties agree that the letter
was sent to Impression.
8

including revising the power of attorney provision that had
caused the plaintiff so much consternation, but did not
ultimately amend the agreement. Wareh Decl. ¶ 30; see also Wareh
Decl., Ex. 8.
In addition, the plaintiff asked to review documents and
records evidencing the identities of the Starnberg clients
originally represented by the defendant, the size of their loans
to Starnberg, and the disposition of all loans to Starnberg
generally. Wareh Decl. ¶ 32. Despite the plaintiff’s protests,
the defendant refused to disclose the identities of his clients
and their loan sizes on the ground that that information is
purportedly subject to the attorney-client privilege. Wareh
Decl. ¶ 34; Wareh. Supp. Decl., Exs. 30-31. As far as the
disposition of loans to Starnberg, the defendant provided only
summary information, not original bank documents or transaction
information. Wareh Decl. ¶¶ 35-38. But, based on that summary
information, the plaintiff noted certain troubling
inconsistencies, including that approximately $2.25 million in
Starnberg loans to Starka were unaccounted for, and that
approximately $7 million were reflected on Starka’s books as
shareholder loans from the defendant’s wife rather than as loans
from Starnberg. Wareh Decl. ¶¶ 35-38. The plaintiff did not view
the defendant’s explanations for the discrepancies as
acceptable. Wareh Decl. ¶¶ 35-39.

9

Nevertheless, by June 2016, the parties had become
optimistic that they would be able to sell Starka to Impression.
On June 3, 2016, the plaintiff, his legal team, and the
defendant’s legal team met in Poland to resolve their
differences. Wareh Decl. ¶ 40. The parties agreed that the
defendant would provide the plaintiff with additional financial
documentation related to Starnberg’s transactions with Starka,
that all meetings with Impression would include the
representatives of both the defendant and the plaintiff, and
that the Starnberg partnership agreement would be revised. Wareh
Decl. ¶ 40; Wareh Decl., Exs. 9-10. Also on June 3, 2016, the
parties orally agreed with Impression to the basic terms of a
sale agreement. Wareh Decl. ¶ 40; Wareh Supp. Decl. ¶ 24;
Lesperance Decl. ¶ 46.
However, the defendant failed to deliver to the plaintiff
the promised financial information and the parties did not amend
the partnership agreement. Wareh Decl. ¶ 43; Wareh Decl., Ex.
14; Lesperance Decl. ¶ 47; Lesperance Decl., Ex. F. The
defendant thereafter refused to respond to several of the
plaintiff’s communications. Wareh Decl. ¶ 44. As a result, on
June 28, 2016, Ms. Toomey returned to Poland to exercise her
rights as a director of Starka and to access Starka’s bank
records herself. Wareh Decl. ¶ 44. After meeting with one of
Starka’s banks, Ms. Toomey was immediately removed from the

10

board of Starka by the defendant and his wife to prevent Ms.
Toomey from accessing additional Starka records. Wareh Decl. ¶¶
31, 44; Wareh Decl., Ex. 12; Lesperance Decl. ¶ 49. The shortlived rapprochement between the parties was over.
On July 5, 2016, the defendant unilaterally agreed with
Impression on the final terms of the Starka sale contract. Wareh
Decl. ¶¶ 49-50; Wareh Decl., Ex. 18 (Starka Sale Contract with
Impression); Lesperance Decl. ¶¶ 48-50. The sale contract
required the defendant to designate a Cypriot bank account for
the deposit of the sale proceeds by August 31, 2015, a deadline
subsequently moved to September 30, 2016 in light of attempts
between the parties to settle this dispute. Wareh Decl. ¶ 51;
Lesperance Decl. ¶ 53. Under the terms of the sale contract, the
funds are to be disbursed in installments, with the first
payment of approximately $500,000 due on October 15, 2016. Wareh
Decl. ¶ 51; Wareh Decl., Ex. 18 at 18. The last payment,
approximately $10 million, is due on July 15, 2018. Wareh Decl.,
Ex. 18 at 18. The sale contract contemplates total payments of
approximately $19 million, which Lesperance swears will be more
than sufficient to repay all of Starnberg’s clients in full,
plus interest. Lesperance Decl. ¶ 52. Lesperance represents that
he will distribute funds to repay the client loans, a promise
the plaintiff does not trust. Wareh Decl. ¶¶ 52-55, 57, 59. As a
compromise, the defendant has proposed that the sale proceeds be

11

held in escrow in a Cypriot account managed by two attorneys
admitted to practice in New York, an offer the plaintiff has
thus far rejected as insufficient to protect his clients’
interests. Wareh Decl. ¶ 53; Wareh Supp. Decl. ¶ 27; Lesperance
Decl. ¶¶ 53, 55.
II.
The standards that govern the issuance of a preliminary
injunction are well established. Ordinarily, a party seeking a
preliminary injunction must show: “(1) a likelihood of
irreparable harm in the absence of the injunction; and (2)
either a likelihood of success on the merits or sufficiently
serious questions going to the merits to make them a fair ground
for litigation, with a balance of hardships tipping decidedly in
the movant’s favor.” Doninger v. Niehoff, 527 F.3d 41, 47 (2d
Cir. 2008).
“To satisfy the irreparable harm requirement, [the
plaintiff] must demonstrate that absent a preliminary injunction
[he] will suffer ‘an injury that is neither remote nor
speculative, but actual and imminent,’ and one that cannot be
remedied ‘if a court waits until the end of trial to resolve the
harm.’” Freedom Holdings, Inc. v. Spitzer, 408 F.3d 112, 114 (2d
Cir. 2005) (quoting Rodriguez v. DeBuono, 175 F.3d 227, 234–35
(2d Cir. 1999)). “Irreparable harm is the single most important
prerequisite for the issuance of a preliminary injunction.

12

Accordingly, the moving party must first demonstrate that such
injury is likely before the other requirements for the issuance
of an injunction will be considered.” Id. (citation and
alteration omitted); see also Emirates Int’l Inv. Co. v. ECP
Mena Growth Fund, LLC, No. 11-cv-9227 (JGK), 2012 WL 2198436, at
*6 (S.D.N.Y. June 15, 2012).
The burden is on the plaintiff to establish his entitlement
to a preliminary injunction. See Emirates Int’l Inv. Co., 2012
WL 2198436, at *6.
The plaintiff has not come close to establishing that he
will suffer irreparable injury absent a preliminary injunction.
The plaintiff’s primary concern is that the defendant will fail
to distribute proceeds from the Starka sale to Starnberg’s
clients, which could potentially subject the plaintiff, as a
general partner of Starnberg, to legal action from Starnberg’s
clients. The fear is speculative and derivative of hypothetical
injuries to Starnberg and, through Starnberg, Starnberg’s
clients. The plaintiff is suing in his individual capacity, and
neither Starnberg nor its clients are parties to this lawsuit.
Accordingly, the defendant’s disbursement of the sale proceeds,
even if adverse to Starnberg and its clients, would not
immediately and actually harm the plaintiff. And although
Starnberg’s clients have apparently been threatening legal
action against the plaintiff since at least January 2016, see

13

Wareh Supp. Decl., Ex. 25, the plaintiff does not claim that any
have actually initiated any legal proceedings. Indeed, as the
plaintiff concedes, given that Starnberg’s clients place such
importance on secrecy and confidentiality, they are unlikely to
initiate public proceedings against the plaintiff.
In addition, any potential harm is clearly speculative
because there is virtually no imminent risk that the defendant
will disappear with the Starka sale proceeds. The sale contract
calls for payments not in one lump sum, but in eight scheduled
installments over a period of two years, with the first payment
of approximately $500,000 due on October 15, 2016, and the last
payment of approximately $10 million due on July 15, 2018. The
defendant’s intentions regarding the reimbursement of
Starnburg’s clients should become clear during that time period.
Accordingly, the plaintiff will have ample time to litigate this
dispute while also assessing the defendant’s concrete conduct
with respect to Starnberg’s clients.
Moreover, any liability that the plaintiff could face would
certainly be addressable by money damages. But “[i]rreparable
injury is one that cannot be redressed through a monetary award.
Where money damages are adequate compensation a preliminary
injunction should not issue.” JSG Trading Corp. v. Tray–Wrap,
Inc., 917 F.2d 75, 79 (2d Cir. 1990); see also In re AutoHop
Litig., No. 12-cv-4155 (LTS), 2013 WL 5477495, at *10 (S.D.N.Y.

14

Oct. 1, 2013) (“Injunctive relief based on a breach of contract
is the exception and not the rule.” (citation and internal
quotation marks omitted)). If the plaintiff fears that the
defendant’s actions might frustrate an anticipated money
judgment, his remedies lie in any enforcement mechanisms allowed
under the Federal Rules of Civil Procedure and the laws of
foreign states (such as Poland, Canada, and Cyprus), not a
preliminary injunction.5 See JSC Foreign Econ. Ass’n
Technostroyexport v. Int’l Dev. & Trade Servs., Inc., 295 F.
Supp. 2d 366, 390 (S.D.N.Y. 2003) (citing Grupo Mexicano de
Desarrollo S.A. v. All. Bond Fund, Inc., 527 U.S. 308, 330-31,
(1999)); see also S.E.C. v. Cavanagh, 445 F.3d 105, 118 n.27 (2d
Cir. 2006) (discussing the broad pre-judgment remedies available
under Canadian law).

5

The plaintiff argues that injunctive relief is warranted
because the defendant, through his allegedly fraudulent course
of conduct, has demonstrated that he is likely to conceal the
proceeds along with his own assets to render himself judgment
proof. The cases the plaintiff relies on are distinguishable.
Each case involved the substantial risk of the defendant evading
an actual money judgement, as opposed to a hypothetical one, or
other extreme circumstances not present here. See, e.g.,
Pashaian v. Eccelston Properties, Ltd., 88 F.3d 77, 87 (2d Cir.
1996) (money judgment); Republic of Philippines v. Marcos, 806
F.2d 344, 353 (2d Cir. 1986) (foreign government’s executive
order asking United States to freeze former dictator’s assets).
In any event, there has been no showing in this case that the
defendant, a Canadian lawyer with a practice in Ontario, would
be unable to satisfy a potential money judgment. See Chateau
Hip, Inc. v. Gilhuly, No. 95-cv-10320 (JGK), 1996 WL 437929, at
*2 (S.D.N.Y. Aug. 2, 1996).
15

The plaintiff attempts to side-step the plain fact that any
injury would be redressable through money damages by arguing
that he will suffer an irreparable harm to his reputation
because the plaintiff will become known as a lawyer who cannot
protect his clients’ interests. However, the risk to the
plaintiff’s reputation is entirely speculative and depends on
the same hypothetical contingencies that doom his claim in the
first place. There has thus far been no failure to disburse any
of the Starka sale proceeds to the Starnberg clients. The
plaintiff will be well-aware of any failure to disburse the
proceeds because the plaintiff is in possession of the sale
contract with Impression and knows the schedule of prospective
payments. Moreover, the plaintiff has hired a law firm
ostensibly to protect his clients’ interests and may prosecute
the litigation successfully, attenuating the risk that his
reputation would be damaged.
The plaintiff also suggests that he will be unable to
fulfill his fiduciary duties to his clients if the defendant
misappropriates the funds. This argument is also speculative.
There is no showing that the defendant will misappropriate any
Starka sale proceeds. In any event, the plaintiff has been
upholding his fiduciary duties to his clients by pursuing this
lawsuit, and engaging another law firm to protect the Starnberg
clients’ interests in Starka.

16

Furthermore, the plaintiff’s delay in bringing the
preliminary injunction motion counsels against a finding of
irreparable injury. “[F]ailure to act sooner undercuts the sense
of urgency that ordinarily accompanies a motion for preliminary
relief and suggests that there is, in fact, no irreparable
injury.” Tough Traveler, Ltd. v. Outbound Prods., 60 F.3d 964,
968 (2d Cir. 1995) (citation and internal quotation marks
omitted); see also Brockmeyer v. Hearst Corp., No. 01-cv-7746
(JGK), 2002 WL 1402320, at *4 (S.D.N.Y. June 27, 2002).
The plaintiff argues that he acted promptly because he
filed suit one month after the defendant agreed to the sale
contract with Impression. The plaintiff frames the issue far too
narrowly. In this action, the plaintiff asserts that the
defendant will misappropriate partnership assets and seeks
clarification of his rights under the Starnberg partnership
agreement because the defendant has been allegedly
misinterpreting that agreement to the plaintiff’s detriment.
These are the same complaints that the plaintiff has had since
at least November 2015 when he instituted ex parte enforcement
proceedings against Starka in Poland. In fact, the plaintiff
soon after told the defendant directly about his concerns,
demanding that any proceeds from any sale of Starka flow into an
account designated by the plaintiff. See Wareh Supp. Decl., Ex.
25. Accordingly, the plaintiff was alarmed about the issues at

17

the heart of this lawsuit for at least ten months before he
filed this suit, which cuts against a finding of irreparable
injury. See, e.g., Weight Watchers Int’l, Inc. v. Luigino’s,
Inc., 423 F.3d 137, 144 (2d Cir. 2005) (“We have found delays of
as little as ten weeks sufficient to defeat the presumption of
irreparable harm that is essential to the issuance of a
preliminary injunction.”); Gym Door Repairs, Inc. v. Young
Equip. Sales, Inc., No. 15-cv-4244 (JGK), 2016 WL 4742317, at *4
(S.D.N.Y. Sept. 12, 2016) (pursuit of alternative judicial
remedies did not justify delay in seeking preliminary
injunction); Life Techs. Corp. v. AB Sciex Pte. Ltd., No. 11-cv325 (RJH), 2011 WL 1419612, at *7 (S.D.N.Y. Apr. 11, 2011)
(“Courts typically decline to grant preliminary injunctions in
the face of unexplained delays of more than two months.”
(citation and alteration omitted)); Hessel v. Christie's Inc.,
399 F. Supp. 2d 506, 521 (S.D.N.Y. 2005) (two-month delay in
filing suit).
Finally, the plaintiff has failed to demonstrate a
likelihood of success on the merits or sufficiently serious
questions going to the merits to make them a fair ground for
litigation, and that the equities tip decidedly in his favor.
Though neither party raised the issue in their papers on the
preliminary injunction, it is unclear that the plaintiff has
Article III standing to pursue his claims going forward. See

18

Grand Manor Health Related Facility, Inc. v. Hamilton Equities
Inc., 941 F. Supp. 2d 406, 415 (S.D.N.Y. 2013) (“[T]he Court has
an independent obligation to assure itself that it has []
subject matter jurisdiction”); see also Fed. R. Civ. P.
12(h)(3). To satisfy the requirements of Article III standing, a
plaintiff must show that (1) he has suffered an actual or
imminent injury in fact, which is concrete and particularized;
(2) there is a causal connection between the injury and
defendant’s actions; and (3) it is likely that a favorable
decision in the case will redress the injury. Lujan v. Defs. of
Wildlife, 504 U.S. 555, 560-61 (1992).
The plaintiff, in his individual capacity, has sued the
defendant, also in his individual capacity. But the plaintiff’s
purported claims may arise out of an injury to Starnberg, which
is not a party to this lawsuit.6 Cf. Shea v. Hambro Am. Inc., 606
N.Y.S.2d 198, 199 (App. Div. 1994) (In New York, “it is settled
that a partnership cause of action belongs only to the
partnership itself or to the partners jointly, and that an
individual member of the partnership may only sue and recover on
a partnership obligation on the partnership’s behalf”); Goodwin
v. MAC Res. Inc., 540 N.Y.S.2d 477, 478 (App. Div. 1989) (“[A]s
a general rule [in New York], partners cannot sue each other at
6

The standing issue is complicated by the agreement between the
parties that foreign law --- specifically, Ontario partnership
law --- governs this dispute.
19

law for acts relating to the partnership unless there is an
accounting, prior settlement, or adjustment of the partnership
affairs.”). The plaintiff’s claims may be subject to similar
standing problems to the extent that they seek to rectify
injuries to Starnberg’s third-party clients, who are not parties
to this suit. See e.g., Compl. ¶ 48 (stating that, if the
defendant disburses Starka sale proceeds to the Cypriot account,
it “would leave [the plaintiff] and his client-investors with no
adequate remedy at law to obtain repayment of their loans”
(emphasis added)); Pl.’s Op. Br. at 14 (describing imminent risk
of injury to clients).
It is unnecessary to reach the standing question now
“[b]ecause the motion for a preliminary injunction lacks merit
and should be denied.”7 Emirates Int’l Inv. Co., 2012 WL 2198436,
at *6; see also APWU v. Potter, 343 F.3d 619, 627 (2d Cir. 2003)
(“A district court retains considerable latitude in devising the
procedures it will follow to ferret out the facts pertinent to
jurisdiction.”).

7

Relatedly, the defendant suggests in “abbreviated format” in
his papers that this action should be dismissed on forum non
conviens grounds, see Def.’s Op. Br. at 10-11, a point the
plaintiff vigorously contests, see Pl.’s Reply Br. at 7-8. The
defendant has moved to dismiss the action on forum non conviens
grounds in a separate motion pursuant to Rule 12(b)(3) of the
Federal Rules of Civil Procedure. See Dkt. 21. It is unnecessary
to reach that issue, which is not fully briefed.
20

CONCLUSION
The foregoing constitutes the Court’s Findings of Fact and
Conclusions of Law. The Court has considered all of the
arguments of the parties. To the extent not specifically
addressed above, the parties’ arguments are either moot or
without merit. The plaintiff’s motion for a preliminary
injunction is denied.
SO ORDERED.
Dated:

New York, New York
September 29, 2016
____________/s/______________
John G. Koeltl
United States District Judge

21