Commercial Division Blog

Posted: January 5, 2022 / Written by: Jeffrey M. Eilender, Samuel L. Butt, Christopher R. Dyess, Joshua Wurtzel, Hillary S. Zilz / Category Commercial

Court Grants Motion For Attachment

In a Decision and Order dated November 23, 2021 in 180 Life Sciences Corp. v. Tyche Capital, LLC, Justice Borrok granted Plaintiff’s motion for an attachment pursuant to CPLR § 6201 based on a money judgment demanded against a foreign company not registered to do business in New York. The Court explained:

180 Life Sciences has demonstrated a likelihood of success on the merits of its cause of actions.  As discussed above, the Guaranty provides for $5,000,001 of net tangible assets and that Tyche was required but refused to fund any shortfall. The Guaranty was absolute and did not provide that it did not survive closing. Additionally, and most significantly, on the record before the court, 180 Life Sciences has sufficiently established that certain costs and expenses were grossly understated and that as such they could not have been discovered prior to the closing. Thus, the total amount of net tangible assets at the time of closing was less than the required $5,000,001and Tyche refused upon demand to fund the shortfall….

180 Life Sciences has a statutory basis for an attachment pursuant to CPLR 6201(1) because it is not disputed that Tyche is a nondomiciliary and is not licensed to conduct business in the state of New York.

180 Life Sciences has also demonstrated that there is an identifiable risk that Tyche will not be able to satisfy the judgment, such that an attachment is warranted because the only assets Tyche appears to own are the escrowed shares which, if released from escrow without attachment, would leave Tyche with insufficient assets to satisfy a judgment. Thus, the attachment is appropriate.

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