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Horvitz & Levy LLP successfully represented respondent Ironridge Global, the plaintiff in this breach of contract action.
Ironridge sued ScripsAmerica, Inc. to recover a debt. The parties settled that dispute and signed a settlement agreement that included a provision for the trial court to retain jurisdiction to enforce the settlement. The settlement called for the defendant to issue shares of its stock to Ironridge according to a formula. A dispute subsequently arose over whether Ironridge was entitled to additional shares. Ironridge applied ex parte to the Superior Court for an order requiring the issuance of additional shares, which was granted. The trial court issued: (1) a mandatory injunction requiring the defendant to issue more shares to Ironridge; and (2) a prohibitory injunction enjoining the defendant from issuing any shares to third parties until the disputed shares were issued to Ironridge.
The defendant immediately filed a notice of appeal which stayed the mandatory injunction portion of the trial court’s order, but which did not stay the prohibitory injunction. Notwithstanding the lack of a stay, the defendant violated the prohibitory portion of the injunction during the pendency of the appeal by issuing over 8.7 million shares to third parties while this appeal was pending.
Horvitz & Levy moved to dismiss the appeal under the disentitlement doctrine, under which an appellate court has discretion to dismiss an appeal when the appellant is in violation of a trial court’s order. The Court of Appeal granted the motion in a published opinion.
