SBI Investments, LLC, 2014-1, and L2 Capital LLC v. Quantum Materials Corp., 03-17-00863-CV

Appellants SBI Investments LLC and L2 Capital, LLC entered secured investment agreements with Quantum Materials Corp. (March 29, 2017) that included promissory notes, registration-rights, and an equity purchase facility.
Quantum executed written, irrevocable transfer letters instructing its Nevada transfer agent, Empire Stock Transfer, to reserve shares and to issue those shares to Appellants upon specified defaults.
Appellants declared defaults after Quantum failed to meet contractual obligations (e.g., registration filing, auditor changes, payment), triggering Appellants’ conversion/exchange rights into reserved shares.
Quantum sued Empire (not Appellants) for conversion and obtained an ex parte temporary restraining order, later extended, and ultimately a temporary injunction prohibiting Empire from transferring shares to Appellants.
Empire never appeared at the injunction hearing and there is no certified proof in the record that Empire received notice of the hearing as required by Texas Rule of Civil Procedure 681.
Appellants appealed, arguing the injunction is procedurally and substantively defective because (1) Empire lacked required notice, (2) Empire was contractually authorized to hold/transfer the shares (negating conversion), and (3) Quantum’s harms are monetary, not irreparable.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether injunction may issue without notice to the enjoined party under Tex. R. Civ. P. 681	Quantum procured TRO and injunction to prevent transfers; counsel asserted notice was faxed to Empire	Appellants: Rule 681 is mandatory; no certified proof Empire received notice; ProDoc cannot fax; docket shows service "unserved"	Court of appeals review: injunction invalid where required notice to enjoined party absent (Appellants argue reversal)
Whether Empire could be liable for conversion given prior written, irrevocable authorization to hold/transfer shares	Quantum: Empire’s transfers would effectuate a de facto dilution/harm to Quantum; conversion claim justifies injunction	Appellants: Empire had express, irrevocable written authorization to hold and issue the shares; Quantum never demanded return; elements of conversion unmet	Appellants argue no probable right to recovery on conversion because authorization negates wrongful dominion and no demand/refusal shown
Whether Quantum showed imminent and irreparable harm to justify injunctive relief	Quantum: transfers would cause loss in corporate value and allow other lenders to piggyback, creating irreparable injury	Appellants: alleged harms are monetary/speculative; monetary damages are adequate remedy and speculative future actions are not "imminent"	Appellants argue injunction improper because claimed harm is monetary and not imminent or irreparable

Butnaru v. Ford Motor Co., 84 S.W.3d 198 (Tex. 2002) (standard for appellate review of injunction orders)
Reagan Nat’l Advert. v. Vanderhoof Family Trust, 82 S.W.3d 366 (Tex. App. — Austin 2002) (temporary-injunction review confined to validity of order)
Apple Imports, Inc. v. Koole, 945 S.W.2d 895 (Tex. App. — Austin 1997) (elements of conversion require demand and wrongful exercise of dominion)
Peralta v. Heights Medical Center, Inc., 485 U.S. 80 (U.S. 1987) (notice requirement tied to constitutional due-process principles)
Tanglewood Homes Ass’n v. Feldman, 436 S.W.3d 48 (Tex. App. — Houston [14th Dist.] 2014) (monetary injury generally inadequate to show irreparable harm)