Court Explains Basis for Calculating Undertaking in Connection With An Injunction

On July 5, 2019, Justice Masley of the New York County Commercial Division issued a decision in Eastmore Mgt., LLC v. Gunta, 2019 NY Slip Op. 32040(U), illustrating the calculation of an undertaking in conjunction with an injunction:

CPLR 6312(b) provides that prior to the granting of a preliminary injunction, the plaintiff shall give an undertaking in an amount to be fixed by the court. The undertaking should reflect those damages defendant may incur if the court determines that the preliminary injunction was erroneously granted. Here, any damage that, Gunta might incur is connected to his inability to secure a position as a result of being restrained from speaking to the extent he wishes about Eastmore's algorithm. Therefore, the effectuation of this preliminary injunction is conditioned upon Eastmore posting an undertaking for the amount equivalent to 10% of Gunta's monthly salary at Eastmore at the time of Gunta's termination multiplied by 13 months, the standard duration for a case commenced in the Commercial Division.

(Internal quotations and citations omitted).

It is common in commercial litigation that parties seek equitable relief such as injunctions, attachments or the appointment of a temporary receiver in order to preserve assets or maintain the status quo when money damages will not make them whole at the end of a litigation. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions regarding seeking--or opposing--such relief.