SRB Investment Services, LLLP v. Branch Banking & Trust Co.
289 Ga. 1
| Ga. | 2011Background
- BB&T and predecessors loaned 16 notes (2005–2007) to two Beens-controlled borrowers guaranteed by related Beens entities; loans mature 2009–2010.
- In 2008, liquid assets securing the loans were moved to SRB and SFB, with additional 2007 guarantors signing liquidity covenants of $35 million.
- SRB and SFB transferred billions of dollars to eight new Beens-controlled LLCs in mid-2008–2009, rendering them insolvent and in breach of liquidity covenants; BB&T learned of transfers in 2010.
- BB&T sued June 22, 2009 for over $19 million and asserted Uniform Fraudulent Transfers Act claims; discovery revealed extensive asset transfers to Beens entities.
- BB&T sought to amend in 2010 to add eight new LLCs as defendants and moved for an interlocutory injunction to freeze transfers; trial court granted an injunction June 20, 2010 freezing $24 million in assets.
- The injunction allowed ordinary-course payments or court-ordered transactions and permitted posting $25 million to the court registry or a standby LC; the enjoined parties appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the injunction was proper given remedies at law and equities. | BB&T argues there is no adequate remedy at law as assets are being dissipation; needs equitable relief. | BB&T holds a remedy at law and laches issues; status quo preservation is not shown. | Remedy at law does not bar injunction; status quo preservation and likelihood of success supported. |
| Whether laches bars the injunction. | BB&T asserts no prejudice from delay and the delay was due to defendants’ concealment. | Appellants contend delay harmed them and supports laches defense. | Laches rejected; delay was due to concealment and lack of demonstrated prejudice. |
| Whether the injunction appropriately preserves the status quo. | Interlocutory relief necessary to prevent asset dissipation and protect plaintiff’s rights. | Status quo could be preserved by other remedies; injunction unnecessary. | Interlocutory injunction proper to preserve status quo amid potential further transfers. |
Key Cases Cited
- Bishop v. Patton, 288 Ga. 600 (2011) (fraudulent transfer cases amenable to injunctive relief; badges of fraud considered as evidence of intent)
- Allen v. Hub Cap Heaven, Inc., 225 Ga.App. 533 (1997) (adequacy of remedy at law generally bars injunctions; exceptions for fraud)
- Ga. State Licensing Bd. for Residential & General Contractors v. Allen, 286 Ga. 811 (2010) (status of equitable relief in regulatory contexts; preservation of status quo)
- Oliver v. Slack, 192 Ga. 7 (1941) (secured creditor remedies include note action or foreclosure)
- Thompson v. Central of Ga. R.R., 282 Ga. 264 (2007) (laches requires prejudice in addition to delay)