Seizure of collateral in target company
After representing a client corporation in the sale of its stock in a target company to a purchaser, collateralized by the target company’s stock, a default occurred. The client suspected the purchaser was draining the assets of the target company and filed suit against the purchaser for an accounting. The accounting revealed extension siphoning of assets of the target company by the purchaser. Pursuant to the terms of the stock purchase agreement, the corporation took back the target company showing up on Monday morning and blocking the purchaser from entry. The court denied the purchasers request for injunctive relief to return the control of the target company to the purchaser.