Schiermeyer v. Thurston, 697 F.Supp.3d 1265

Plaintiff Eric Schiermeyer filed a shareholder-derivative suit on behalf of nominal defendant Blockchain Game Partners, Inc. (Gala Games) alleging director Wright Thurston moved ~8.6 billion GALA tokens (≈$130M) from jointly accessible company wallets into wallets he controlled.
Thurston contends the tokens he moved were his personal property; Schiermeyer contends they were company property and thus stolen.
Schiermeyer discovered the transfers in April 2021, tracked the moved tokens, and after repeated private confrontations developed and launched a replacement token (GALA v2) in May 2023 to neutralize remaining taken tokens.
Schiermeyer sought emergency relief (TRO and preliminary injunction) in Sept. 2023 to freeze assets traceable to the alleged theft, require an accounting, and permit expedited discovery.
The court denied preliminary relief, emphasizing (1) a 2.5-year delay between discovery and filing, (2) the fungible nature of cryptocurrency and compensability by money damages, and (3) lack of evidence Thurston is insolvent or likely to dissipate other assets.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a TRO/PI should freeze tokens and require an accounting	Tokens were misappropriated and must be frozen to prevent dissipation and irreparable harm	Tokens were owned by Thurston; risk of further dissipation is reduced after GALA v2 and plaintiff delayed seeking relief	Denied — plaintiff failed to show likely irreparable harm necessary for preliminary relief
Effect of plaintiff's delay on emergency relief	Delay was strategic/necessary to avoid provoking Thurston and to pursue nonjudicial remedies	Delay undermines urgency; plaintiff engaged in self-help and contained the risk	Court: 2.5-year delay undercuts a finding of imminent irreparable harm
Whether taking fungible cryptocurrency constitutes irreparable harm	Taking property is generally irreparable; crypto poses a heightened dissipation risk	Crypto is fungible and readily valued; economic loss is compensable with money damages	Court: Crypto is fungible; mere economic loss does not ordinarily justify injunction absent additional factors
Whether insolvency or dissipation risk justifies injunction	Dissipation risk and potential insolvency justify preserving assets pre-trial	No evidence Thurston lacks resources or is dissipating other assets	Court: Plaintiff failed to show likely and imminent insolvency or inability to pay; injunction not warranted

Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7 (2008) (establishes preliminary injunction standard: likelihood of success, irreparable harm, balance of equities, public interest)
First Western Capital Mgmt. Co. v. Malamed, 874 F.3d 1136 (10th Cir. 2017) (irreparable harm is the most important prerequisite for preliminary relief)
Heideman v. South Salt Lake City, 348 F.3d 1182 (10th Cir. 2003) (economic loss usually not irreparable; injury must be imminent)
Dominion Video Satellite, Inc. v. EchoStar Satellite Corp., 269 F.3d 1149 (10th Cir. 2001) (money damages inadequate standard for irreparable harm analysis)
Kansas Health Care Ass'n, Inc. v. Kansas Dep't of Social & Rehabilitation Servs., 31 F.3d 1536 (10th Cir. 1994) (delay in seeking preliminary relief undermines claim of irreparable harm)
GTE Corp. v. Williams, 731 F.2d 676 (10th Cir. 1984) (delay cuts against a finding of irreparable injury)
CRP/Extell Parcel I, L.P. v. Cuomo, [citation="394 F. App'x 779"] (2d Cir. 2010) (insolvency can make economic harms irreparable only if likely and imminent)
Schrier v. Univ. of Colo., 427 F.3d 1253 (10th Cir. 2005) (purpose of preliminary relief is to prevent future irreparable harm, not to remedy past harm)