On Friday (6/9/23), our firm obtained a favorable decision in the case of Lash 68 LLC v. Interior Management, LLC et al., in which the New York County Supreme Court (Justice Lebovits) granted our client a temporary restraining order prohibiting the defendants, a general contractor and its managers, from dispersing any funds from their bank accounts (except for daily necessities in which defendants are required to provide an accounting to the court) pending the hearing on the motion.
In the case our client is suing a general contractor and its individual managers for, among other things, conversion of $558,742.79 that was deposited by our client with the general contractor for purposes of purchasing construction materials and as deposits for payments to subcontractors pursuant to a construction contract. Instead of making payments to the subcontractors or purchasing construction materials, the general contractor closed down its business and appears to have absconded with the $558,742.79 in payments made by our client, which were required by Lien Law to be held in trust until the project was complete. The emergency application seeking the temporary restraining order detailed many concerning facts, including that it appeared that the general contractor and its managers may have been operating a Ponzi scheme type business, which was evidenced by the fact that many of the general contractor’s clients have claimed that they were the subject of the same type of theft, with many millions of dollars claimed to have been stolen from the general contractor’s clients Lien Law trust accounts.
The decision on the temporary restraining order application can be found here (link to decision) and represents a decisive first step in vindicating and protecting our client’s rights to the return of its deposits advanced under the construction contract. The remainder of the emergency application and the case continue to be litigated. Brian Bendy and Jeffrey Goldman are leading the case for BBG.