Candid Ventures, LLC v. Dew Ventures, Inc.

Background

On November 27, 2024, the court issued a temporary restraining order (a short-term order designed to preserve the situation while the court considers further relief). The order barred Dew Ventures, Inc. from transferring, selling, or otherwise giving control or possession of assets it had received from Nestlings to any third party.

The parties had agreed to a January 30, 2025 hearing on Candid Ventures’s motion for a preliminary injunction, which is a longer-term request for injunctive relief while a case proceeds. Candid Ventures filed that motion on December 31, 2024. That same day, Dew Ventures and Specially Appearing Defendant Feathers Up India PVT LTD filed a motion asking the court to clarify whether transferring the assets back to Nestlings would violate the temporary restraining order. The defendants also asked the court to continue the preliminary-injunction hearing so the transfer could occur, which they said would make the motion moot.

Parties’ Positions

Candid Ventures argued that the temporary restraining order’s prohibition on transferring assets to “any third party” included Nestlings. It also argued that returning the assets would prejudice Candid Ventures by requiring it to seek immediate relief again in the Southern District of Ohio, while the defendants would temporarily be free to act concerning the assets.

The defendants argued that Candid Ventures would not be prejudiced because it could seek relief in Ohio, where a related case was pending. They also characterized the proposed transfer as a way to streamline apparently duplicative litigation in different jurisdictions. On reply, they argued that Nestlings was a necessary party, but the court found that argument immaterial to the interpretation of the temporary restraining order.

Ruling

Judge Haywood S. Gilliam, Jr. denied the defendants’ request to transfer the assets to Nestlings. The court stated that the temporary restraining order was intended to preserve the status quo and that “any third party” referred to a party beyond Candid Ventures, which was disputing ownership and seeking injunctive relief, and Dew Ventures, which held the assets when the order was issued. The court held that Nestlings was a third party under the order, even if Nestlings were a necessary party to the lawsuit. Accordingly, the defendants could not transfer the assets to Nestlings while the temporary restraining order remained in effect.

The court also denied the defendants’ request to continue the preliminary-injunction hearing. Although the court strongly urged the parties to consider an agreement addressing the entire dispute in the Southern District of Ohio, it did not order that change. The court’s order resolved the requests concerning the temporary restraining order and the hearing; it did not decide the underlying fraudulent-conveyance claim.