We previously reported on the Kentucky court that issued a temporary restraining order against BitConnect. On Wednesday, that TRO was extended to February 27.
Yesterday, a new lawsuit was brought against BitConnect in federal court in Florida. The judge in this case refused to enter a TRO freezing the defendants’ assets. Following are the material parts of the decision:
Plaintiffs argue that without the TRO, Defendants may “dissipate money generated from Plaintiffs and the Class or simply transfer those funds into another financial scam.” An Ex Parte TRO is an extraordinary remedy as “our entire jurisprudence runs counter to the notion of court action taken before reasonable notice and an opportunity to be heard has been granted both sides of a dispute.”
Plaintiffs are not entitled to an ex parte TRO as they fail to show that immediate and irreparable injury, loss, or damage will occur before Defendants are given an opportunity to respond as required by Rule 65(b). lt is possible that Defendants may transfer substantial assets to third-parties, but Plaintiffs fail to “clearly show” that such action is not just possible, but “immediate” and would result in “irreparable injury.” Fed. R. Civ. P. 65(b). After serving Defendants, Plaintiffs may move for a preliminary injunction, at which time the Court may shorten the briefing schedule and may set a hearing if appropriate to expeditiously resolve the matter.
In connection with the Kentucky lawsuit, we remarked how rare it was for a U.S. court to issue an ex parte TRO. It seems clear that it was the ex parte nature of the request to the Florida court that played a significant role in the request being denied, as the judge almost invited a similar request for relief, but with notice to the defendants. Moreover, in light of the Kentucky case, the decision seems correct. That is, there is already a TRO in place forbidding BitConnect from moving its assets and, therefore, the threat of dissipation of assets seems to have already been alleviated.
