Court Grants Motion For Preliminary Injunction Barring Defendant From Acting For Company

On October 15, 2024, Justice Margaret A. Chan issued a Decision and Order in Vision Biobanc Holdings LLC v. Derek R. Taller, Index No. 651706/2024, granting Plaintiff Vision Biobanc Holdings LLC’s (the “Company” or “Vision”) motion for a preliminary injunction that, in essence, barred Defendant Taller from acting on behalf of the Company or transferring any funds of the Company. The relationship between the Company’s largest investor, Barry Saxe, and Taller had soured and Saxe and other members of the Company ultimate removed Taller from his positions as CEO and Chairperson. When he learned of his ouster, Taller allegedly undertook several actions, including attempting to transfer $550,000 from an account of the Company. The Court granted Vision’s motion for a preliminary injunction against Taller, explaining:

Here, contrary to Taller's suggestion (see Opp at 3), there is no active "control dispute" between two boards-at least in the traditional sense at issue in Aerojet preventing the Board from validly acting through Vision. Rather, as alleged, Vision purportedly has an established Board in place, which it argues was formally constituted, at minimum, following the Special Meeting (see Saxe aff ¶ 15; compl ¶ 18). Although Vision is now seeking a declaration as to the validity of the new Board's appointment and Taller's removal, it is doing so because, in a purported blatant disregard of Vision's members' will, Taller has engaged, and is continuing to engage, in disruptive conduct harming the Company (see compl ¶¶ 22·24; Saxe aff ¶¶ 16-20). Consequently, insofar as Delaware (and by extension Puerto Rico) has adopted a so-called principle of corporate neutrality, there is no basis on the present record to conclude that Vision ran afoul of it by commencing this lawsuit.[] Such a conclusion is further buttressed by the fact that Taller, through Vision, previously commenced a similar action just months prior to this lawsuit (see Saxe aff ¶ 21; compl ¶¶ 3, 16).

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As the record before the court establishes, through two separate votes, members holding more than 70% of the Company's outstanding membership interests purportedly voted to remove Taller and vest the new Board with authority to act on Vision's behalf (see Saxe aff ¶¶12· 13, 15; see also compl ¶¶ 14· 15, 18; Taller aff ¶ 4; Hill aff ¶ 3). Despite these votes, Taller has repeatedly engaged in conduct harming the Company's assets, impeding its operations, and threatening its viability as a going concern (Saxe aff ¶¶ 21-28; compl ¶ 19; see also Hill aff ¶ 10). These facts amount to sufficient evidence demonstrating that Vision has a clear right to the relief it seeks.

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Vision maintains that it will suffer irreparable harm if Taller is not enjoined (see MOL at 8-9). The court agrees. As set forth by Saxe, since Taller's purported ouster, he has continued to engage in disruptive behavior that has prevented Vision from accessing its accounts, impeded its ability to make payments to its vendors and collect funds from other third parties, deprived the Company of access [sic] necessary funds through unauthorized withdrawals, and caused chaos and confusion as to who is in control of the Company

The attorneys at Schlam Stone & Dolan frequently litigate disputes concerning control over companies. Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning such issues.