United States District Court, E.D. Wisconsin
STADTMUELLER, U.S. DISTRICT JUDGE
action, Plaintiffs, Liquidators of Traxiar Drilling Partners
II Pte., Ltd. (“Traxair”), assert several causes
of action arising from allegedly fraudulent transfers of
funds to Defendant Rocky Point International LLC
(“Rocky Point”). (Docket #1). On September 26,
2016, Plaintiffs filed an expedited motion for temporary
restraining order and preliminary injunction which seeks to
restrain Defendant from transferring the subject assets as
well as a home in the state of Wisconsin which was
purportedly renovated using a portion of those funds. (Docket
#3). The Court set an expedited briefing schedule for the
motion. (Docket #18). The motion is now fully briefed and,
for the reasons stated below, it will be denied.
following facts, most of which are undisputed, are drawn from
the complaint and the parties' submissions. In late 2013,
Symphony Ventures Pte. Ltd. (“Symphony”) entered
into a loan agreement for $15 million with Traxiar in order
to finance the down payment on the Somnath, an oil rig
located in Qatar. Pursuant to the agreement, in December
2013, Symphony advanced $6 million of the $15 million loan to
a bank account owned by Dag Dvergsten Pte., Ltd.
(“DDPTE”). The transfer was not made directly to
Traxair because according to Mr. Dvergsten, a Norwegian
businessman and owner of DDPTE, Traxiar did not have its own
bank account. Once it did have an account, DDPTE was to
transfer the $6 million to Traxiar's account.
allege that DDPTE did not follow through on its promise.
Instead, on December 27, 2013, DDPTE transferred $3.25
million of the $6 million to TY Global, LLC (“TY
Global”), a company located in Houston, Texas. Three
days later, on December 30, 2013, TY Global transferred $2.25
million to AT Offshore, LLC (“AT Offshore”),
another Houston company. On January 2, 2014, AT Offshore
transferred $2 million to Rocky Point, which is located in
Pewaukee, Wisconsin. All the transfers were by bank wire. Mr.
Dvergsten does not have an ownership interest in either TY
Global or AT Offshore but, at the time of the transfers, he
is alleged to have owned and controlled DDPTE and Rocky
Point. Because it appears that Mr. Dvergsten transferred
Traxair's funds through TY Global and AT Offshore into a
company which he controls, Plaintiffs believe that Dvergsten
intended to keep for himself the $2 million transferred to
Rocky Point rather than transfer it to Traxair.
to Rocky Point, the $3.25 million transferred to TY Global
was for commissions and fees for brokerage services. The loan
agreement between Symphony and Traxair contemplated Traxair
paying brokers for their services in connection with the oil
rig purchase. TY Global transferred some of that payment to
AT Offshore, which then sent $2 million to Rocky Point. Rocky
Point claims that it received the $2 million so that it could
reinvest it for TY Global's benefit. Rocky Point
allegedly used most of the funds to renovate a lake house in
Traxiar defaulted on its loan from Symphony because the
Somnath was not available for sale. Traxiar never purchased
the Somnath and never returned the $6 million. Plaintiffs,
acting as liquidators for Traxair, have recovered funds so
that the balance due from Traxiar is now just a little more
than $4.3 million.
action, Plaintiffs seek to recover Rocky Point's $2
million pursuant to the Wisconsin Uniform Fraudulent
Transfers Act (“WUFTA”), which allows a creditor
to recover transfers made either “[w]ith actual intent
to hinder, delay or defraud any creditor” or
“[w]ithout receiving a reasonably equivalent value in
exchange for the transfer.” See Wis. Stat.
§ 242.04(1). Plaintiffs say that both circumstances
occurred here, since, among other things, there are no
business relationships between TY Global, AT Offshore, and
Rocky Point that would provide a justification for the
transfers. Moreover, Plaintiffs assert, the allegedly
secretive nature of the transactions indicates that they were
undertaken with the intent to defraud Traxair. In addition to
their WUFTA claims, Plaintiffs assert numerous related
common-law causes of action, including unjust enrichment and
originally filed this action in the U.S. District Court for
the Southern District of Texas, where TY Global and AT
Offshore are located. However, the district court there
dismissed Rocky Point from that case for want of personal
jurisdiction. Plaintiffs then filed their complaint in this
court, and they now seek a preliminary injunction restraining
$2 million of Rocky Point's assets and the Wisconsin lake
house during the pendency of these proceedings.
must establish each of the following elements to be entitled
to a preliminary injunction: (1) that they are likely to
succeed on the merits; (2) that they are likely to suffer
irreparable harm in the absence of preliminary relief; (3)
that the balance of equities tips in their favor; and (4)
that an injunction is in the public interest. D.U. v.
Rhoades, 825 F.3d 331, 335 (7th Cir. 2016). A
preliminary injunction is “an extraordinary remedy and
is never awarded as of right.” Knox v.
Shearing, 637 F. App'x 226, 228 (7th Cir. 2016). To
meet their burden, Plaintiffs must make a “clear
showing that [they are] entitled to such relief.”
Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7,
22 (2008). WUFTA permits courts to issue preliminary
injunctions against further disposition of the subject assets
“[s]ubject to applicable principles of equity and in
accordance with applicable rules of civil procedure.”
Wis.Stat. § 242.07(c)(1).
have not made the robust showing needed to secure a
preliminary injunction in this case. The Court need only
discuss one of the required elements-irreparable harm-to show
why Plaintiffs' motion must be denied.
have not established that they will suffer irreparable harm
if the injunctive relief they request is not granted. As the
Supreme Court has stated, “[t]he key word in this
consideration is irreparable.... The possibility that
adequate compensatory or other corrective relief will be
available at a later date, in the ordinary course of
litigation, weighs heavily against a claim of irreparable
harm.” Sampson v. Murray, 415 U.S. 61, 90
(1974) (quotation omitted). Where harm may be compensated by
an award of money damages, courts generally have refused to
find that harm irreparable. See, e.g., Morton v.
Beyer, 822 F.2d 364, 371-72 (3d Cir. 1987); Foxboro
Co. v. Arabian Am. Oil Co., 805 F.2d 34, 36 (1st Cir.