Gran Sabana Corporation N.V. v. Kossoff
- Ronnie Abrams
- 1:21-cv-03154
- U.S. District Court · Southern District of New York
- 3
In Gran Sabana v. Kossoff, Judge Abrams preliminarily froze assets and granted expedited discovery after finding likely success and irreparable harm.
Gran Sabana obtained temporary protection for its escrow funds and access to expedited discovery. Kossoff was barred from using certain accounts or transferring or disposing of assets, while Kossoff PLLC accounts were excluded from the freeze. The three banks and Julia McNally were subject to subpoenas.
What happened
Gran Sabana Corporation N.V. sued Mitchell H. Kossoff over claims including breach of contract, breach of fiduciary duty, conversion, unjust enrichment, and legal malpractice. The court had previously issued a temporary restraining order and authorized expedited discovery.
After an April 16, 2021 hearing, the court found that Gran Sabana was likely to succeed on those claims, faced irreparable harm because a judgment might be uncollectible, and was favored by the balance of equities and the public interest. The court also found that Kossoff had been properly served.
Judge Abrams entered a preliminary injunction freezing certain accounts and barring Kossoff from using them or transferring or disposing of assets or escrow funds. The court granted Gran Sabana’s request for limited expedited discovery, allowed subpoenas to three banks and Kossoff’s bookkeeper, and did not require an undertaking.
The detailed version
- Gran Sabana Corporation N.V. v. Kossoff · No. 1:21-cv-03154
- Ronnie Abrams
- Apr. 19, 2021
Background
Gran Sabana Corporation N.V. applied for a preliminary injunction against Mitchell H. Kossoff. A preliminary injunction is a court order that preserves a situation or prevents certain conduct while a case is pending. The court had issued a temporary restraining order on April 14, 2021, barring Kossoff from using specified bank accounts and from transferring, dissipating, or disposing of his assets or Gran Sabana’s escrow funds. The April 14 order also authorized expedited discovery and subpoenas.
Findings at the April 16 Hearing
The court found that service of the complaint and related filings on Kossoff was proper. It found that Gran Sabana had established a likelihood of success on the merits of its claims for breach of contract, breach of fiduciary duty, conversion, unjust enrichment, and legal malpractice.
The court also found that Gran Sabana had established irreparable harm because evidence indicated that any judgment it obtained against Kossoff could be uncollectible. It determined that the balance of the equities favored Gran Sabana because the injunction would require Kossoff to perform his legal duties, while Gran Sabana faced irreparable harm without an injunction. The court further found that the injunction would not harm the public interest.
Order
Pending disposition of the action, the court preliminarily enjoined Kossoff from using bank accounts he owned or controlled at J.P. Morgan Chase Bank, Valley National Bank, and Signature Bank that might contain the escrow funds or evidence of their transfer. It also enjoined him from transferring, dissipating, or otherwise disposing of any of his assets or Gran Sabana’s escrow funds, wherever located and whether directly or indirectly controlled by him.
The court ordered that accounts owned or controlled by Kossoff at those banks, or at any other bank that might contain the escrow funds or evidence of their transfer, be frozen. The order excepted Kossoff PLLC accounts.
The court granted Gran Sabana’s request for limited expedited discovery under Federal Rule of Civil Procedure 26(d). Gran Sabana could subpoena J.P. Morgan Chase Bank, Valley National Bank, and Signature Bank for records identifying accounts owned or controlled by Kossoff, wire-transfer records from 2018 through the present, and information about assets that could satisfy a judgment. If those responses identified additional accounts or asset locations, Gran Sabana could issue supplemental subpoenas to trace the funds or assets. Gran Sabana could also subpoena Julia McNally, identified as Kossoff’s bookkeeper, for testimony about the current location of the escrow funds.
The court ruled that Gran Sabana was not required to provide an undertaking, meaning security to cover potential losses caused by the injunction. Gran Sabana was required to file a litigation-status update by May 19, 2021.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.