EFiled: Apr 09 2015 02:57PM EDT
Transaction ID 57054285
Case No. Multi-Case
COURT OF CHANCERY
OF THE
STATE OF DELAWARE
JOHN W. NOBLE 417 SOUTH STATE STREET
VICE CHANCELLOR DOVER, DELAWARE 19901
TELEPHONE: (302) 739-4397
FACSIMILE: (302) 739-6179
April 9, 2015
Stephen P. Lamb, Esquire Kevin G. Abrams, Esquire
Paul, Weiss, Rifkind, Wharton J. Peter Shindel, Jr., Esquire
& Garrison LLP Abrams & Bayliss LLP
500 Delaware Avenue, Suite 200 20 Montchanin Road, Suite 200
Wilmington, DE 19801 Wilmington, DE 19807
Thad J. Bracegirdle, Esquire
Wilks, Lukoff & Bracegirdle, LLC
1300 N. Grant Avenue, Suite 100
Wilmington, DE 19806
Re: AM General Holdings LLC v. The Renco Group, Inc.
C.A. No. 7639-VCN
The Renco Group, Inc. v. MacAndrews AMG Holdings LLC
C.A. No. 7668-VCN
Date Submitted: April 2, 2015
Dear Counsel:
On March 25, 2015, the Court entered a temporary restraining order
preventing the Renco Parties1 from using the assets of Ilshar Capital LLC
(“Ilshar”) to pay a substantial judgment recently entered in the Southern District of
1
The Renco Group, Inc., Ira L. Rennert, and ILR Capital, LLC are the “Renco
Parties.”
AM General Holdings LLC v. The Renco Group, Inc.
C.A. No. 7639-VCN
The Renco Group, Inc. v. MacAndrews AMG Holdings LLC
C.A. No. 7668-VCN
April 9, 2015
Page 2
New York in an unrelated matter. That order also prohibited the Renco Parties
from using Ilshar’s assets to obtain an appeal bond.
The risk that Ilshar’s funds would be used for such purposes has been
substantially reduced by the posting of a supersedeas bond to cover the risk of
nonpayment of the judgment. There does remain a risk, but it is significantly
reduced from the potential harm that supported entry of the temporary restraining
order.
The Renco Parties had resisted AM General Holdings LLC’s (“Holdco”)
efforts at discovery in support of its motion for a preliminary injunction. They
now seek to terminate the preliminary injunction process initiated by Holdco and
to have the temporary restraining order vacated because the potential harm—the
risk that Ilshar’s assets will be used for purposes of the New York judgment—has
been substantially reduced.
AM General Holdings LLC v. The Renco Group, Inc.
C.A. No. 7639-VCN
The Renco Group, Inc. v. MacAndrews AMG Holdings LLC
C.A. No. 7668-VCN
April 9, 2015
Page 3
Holdco pursued the interim injunctive relief because of the potential
exposure of Ilshar’s funds. The risk it identified was real, even if there was a
speculative aspect to it. If there had been no New York judgment, it is unlikely
that Holdco’s injunctive relief efforts would have occurred last month. That
potential for irreparable harm has abated to the extent that, at least on the present
record, the expedited scheduling of a preliminary injunction is no longer
warranted.
The scope of discovery for preliminary injunctive purposes has been a
principal topic of debate between the parties. That discovery, such as discovery
into the self-dealing transactions by the Renco Parties over the last several years,
goes to the core of the dispute in the case in chief and is better addressed in the
regular course of this proceeding—not as an appendage to expedited proceedings.
If the Renco Parties are being unreasonable and recalcitrant, as Holdco seems to
suggest, the appropriate way to obtain the discovery is through a motion to compel.
AM General Holdings LLC v. The Renco Group, Inc.
C.A. No. 7639-VCN
The Renco Group, Inc. v. MacAndrews AMG Holdings LLC
C.A. No. 7668-VCN
April 9, 2015
Page 4
Accordingly, the temporary restraining order entered on March 25, 2015,
will be vacated and will expire as of 11:59 p.m. today. Unless the Renco Parties
file a claim within five days against the security posted by Holdco for the
temporary restraining order, that bond will be released. The preliminary injunctive
process is no longer justified and, for present purposes, this proceeding no longer
needs expedited handling.
IT IS SO ORDERED.
Very truly yours,
/s/ John W. Noble
JWN/cap
cc: Joel Friedlander, Esquire
Register in Chancery-K