Sometimes business disputes involve a true emergency: outright stealing or embezzling by a company insider. For example, if a business owner suspects that the company accountant or even another partner is embezzling funds or otherwise stealing from the business, it is important to take immediate action to stop the potential loss of funds pending the resolution of the dispute. Particularly since a lawsuit is likely to take months, or even years, to resolve, the aggrieved partner can try to stop the theft in its tracks and freeze any stolen funds or assets in place. To do that, the aggrieved partner can ask the court for a temporary restraining order (TRO) and preliminary injunction.
A court may issue a TRO when there is an immediate need to protect business assets, sometimes even without notice to the other party, provided one can show that he or she is likely to succeed on the merits and that irreparable injury will occur without immediate relief. The TRO can take many forms. It may order the other party to stop transferring money from a company account, or to not withdraw or transfer any money out of a personal bank account into which stolen funds were transferred. Following the TRO, the court normally has a preliminary injunction hearing, in the form of an evidentiary hearing or mini-trial, to determine whether the TRO (or similar relief) should remain in place pending a complete trial on the merits.
Whether a party chooses to seek a TRO or a preliminary injunction, the burden on a party to justify this form of relief is quite high. A court is not likely to grant a TRO or preliminary injunction in all cases. When a court does grant this relief, however, it can be a good indication of how the court ultimately will rule in the case. In any case, a TRO or preliminary injunction can protect the continued loss of assets throughout the litigation process.
The loss of assets is a serious matter because it materially and directly impacts the operations of the business. When you are facing this type of emergency, or any business dispute, you need an experienced Arizona trial attorney to get you the best result possible. Contact Williams Mestaz, L.L.P., at (602) 256-9400 today, and set up an appointment to speak with us about your case.