Injunctions: “Stopping the Bad Guy in His Tracks”
When a business partner, control person of a company (CEO, CFO, etc.), or someone in a sensitive senior management position does something unexpected that places the company at risk, a business lawyer must take steps to make sure the business is able to protect itself. An immediate response from the Court is a necessary first step. Although seeking money damages is also part of the case, money damages is meaningless if the business was buried by the bad actor’s conduct. The business lawyers at Vethan Law Firm, PC (VLF) look at the feasibility of an injunction – to immediately stop someone from destroying the company – along with a lawsuit for money damages. But just because someone wants an injunction, doesn’t mean they get one.
Essential boxes must be checks prior to a judge even considering granting such early and extraordinary relief.
Lawsuit and Injunction
A typical lawsuit seeks to recover money for the harm done. But, if a trusted person at the business – typically a partner, shareholder, or a senior manager, took valuable information or clients from the business, a company must act quickly, and with precision to stop the bad actor. The judge hearing the injunction application must be convinced this conduct will cause irreparable harm to the business, which money alone can’t fix. The threatened harm to the business is not easily repaired. The business must show the harm is an “irreparable injury.” If there is a potential for irreparable harm, an injunction may be appropriate. Even if the business prevails on an injunction, however, it still has a lawsuit also claiming a monetary recovery. Conversely, if the judge does not see an injunction as appropriate in a case, the business still has a lawsuit claiming money damages.
What Does an Injunction Look Like?
Injunctive relief is an integral part of a legal response to someone attacking the continued survival of the business. There are, of course, other reasons for injunctions, such as foreclosures, threats to the person or property, and the like, but the focus for this discussion is on businesses.
To seek an application for injunction, a business must show that an injunction is necessary to keep things operating the way it is – to preserve the status quo. A Court may be petitioned to either prohibit certain conduct by the bad guy (competing, disclosing trade secrets and confidential information, taking a corporate opportunity for themselves) or require certain actions from a party (turnover passwords to the website or the bank account).
Business Viability Issues
The rights sought to be protected by an injunction are typically significant to the business. Preservation of trade secrets, confidential information, having a senior employee or partner taking a corporate opportunity that legally belongs to the business, competing in violation of a legally enforceable non-compete agreement, are all reasons to ask a judge for an injunction. if these rights are not protected at the outset, they may be lost forever.
If your business is faced with such an attack, call the attorneys at Vethan Law Firm, P.C. where Your Problem is Our Business. ®