Illinois Injunctions Case - Part 3

In our prior two posts, we considered Five Mile Capital Westin North Shore SPE, LLC v. Berkadia Commercial Mortgage, LLC, and other defendants, rendered by the Appellate Court of Illinois, First District, on December 24, 2012.  

Participant C objected to selling the property after it was acquired by a credit bid at a foreclosure sale because it would recoup none of its investment, and its appraisers claimed that the appraisal of the property obtained by the servicer was undervalued by about $14 million, and that if the property were held for a few more years, it would appreciate another $6 million.   In making that claim, the participant added credibility to its complaint--it had specific figures, backed by experts--but sowed the seeds of its own defeat in requesting a preliminary injunction, for by quantifying the damages that it was about to sustain by reason of what it claimed was a premature sale, it showed what money damages would compensate it for what it claimed was a breach of contract.   

An essential element of a preliminary injunction action is the inadequacy of a legal remedy.  You cannot on the one hand claim that your opponent has damaged you by a specific amount (the amount the property should be sold for less what the other participants would get from that sale) and then claim that amount is too speculative to support a money damages remedy, which is what this participant argued in trying to get an injunction that (either by getting itself appointed a special servicer or by directly stopping the sale) would enjoin the sale.   

For the plaintiff's sake, I hope none of its injunction court papers, when arguing that its money damages were speculative, impeached the value of the evidence it will need to introduce at the money damages trial.  

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