Judge: Mark H. Epstein, Case: 24SMCV02820, Date: 2024-07-31 Tentative Ruling

Case Number: 24SMCV02820    Hearing Date: July 31, 2024    Dept: I

This is an application for the appointment of a receiver and a preliminary injunction.  The case stems from a loan of $5,386,000 from the lender to defendant.  The loan has been assigned to plaintiff here.  The loan is secured by certain real property.  As part of the loan agreement, the borrower agreed that it would allow no other liens on the property and made assurances that it did not have other debt.  However, in December 2023, the borrower allowed MRC to place a lien on the property of $30 million to secure certain other obligations the borrower had.  Plaintiff asserts that this violated the loan agreement in two ways: (1) by allowing the lien and (2) by not disclosing the obligations (or by creating the obligation).  Plaintiff asserts that the loan is in default and is foreclosing.  In the interim, plaintiff seeks the appointment of a receiver and the assignment of rents from the property, both of which are remedies for which the loan agreement expressly provides.  Plaintiff states that the borrower will not oppose the motion and no opposition has been received.

The court has reviewed the papers and the evidence and finds that plaintiff has made out a strong likelihood of success on the merits.  Further, given the amount of the lien and the express language in the contract, the court finds that the balance of hardships tilts in plaintiff’s favor, at least on the papers presented.  Further, courts have long allowed specific performance of contractual remedies such as the ones here.  Given all of that, and the lack of any opposition, the court GRANTS the motion as prayed.  Plaintiff suggests a $10,000 bond for the receiver and a $10,000 bond for the injunction.  While this seems low to the court, given the strong likelihood of success and lack of opposition, the court will adopt those numbers.

The court will therefor sign the proposed order.