Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_07-cv-02344/USCOURTS-casd-3_07-cv-02344-0/pdf.json

Nature of Suit Code: 850
Nature of Suit: Securities, Commodities, Exchange
Cause of Action: 15:78m(a) Securities Exchange Act

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07cv2344

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

LEGACY TRADING GROUP, LLC,

Plaintiff,

v.

UNICO, INC.,

Defendant.

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Civil No. 07cv2344-L(RBB)

ORDER GRANTING EX PARTE

APPLICATION FOR TRO;

SETTING BOND; and SETTING

BRIEFING SCHEDULE AND DATE

FOR SHOW CAUSE HEARING

On December 17, 2007, plaintiff Legacy Trading Group (“Legacy”), a California limited

liability company, filed the above-captioned case1

 against Unico, Inc. (“Unico”) alleging

violation of Section 14(a) and (c) of the Securities Exchange Act of 1934 and the Rules

promulgated thereunder, and Arizona Revised Statute § 10-705. Unico is a publicly-traded

Arizona corporation with San Diego as its principal place of business, with shares registered

with the Securities and Exchange Commission (“SEC”). Unico filed a Schedule 14A Definitive

Proxy Statement on November 20, 2007, with the SEC disclosing that Unico would hold a

Special Meeting of shareholders on December 21, 2007, in San Diego, California. At that

Special Meeting, the shareholders were to vote on amending Unico’s Articles of Incorporation in

order to effectuate a reverse stock split.

Case 3:07-cv-02344-L-RBB Document 8 Filed 12/18/07 Page 1 of 4
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07cv2344

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Plaintiff filed an ex parte application for a TRO and notice was given to defendant of the

Complaint and application for TRO. In its ex parte application, plaintiff contends that notice of

the Special Meeting and/or the Proxy Statement were not provided to all shareholders. Prior to

the December 18, 2007 hearing on plaintiff’s application, defendant filed an opposition. 

Counsel for both parties appeared at the hearing.

A party seeking injunctive relief under Federal Rule of Civil Procedure 65 must show

either (1) a combination of probable success on the merits and the possibility of irreparable

harm, or (2) that serious questions are raised and the balance of hardships tips sharply in the

moving party's favor. Walczak v. EPL Prolong, Inc., 198 F.3d 725, 731 (9th Cir. 1999); Sun

Microsystems, Inc. v. Microsoft Corp., 188 F.3d 1115, 1119 (9th Cir. 1999); Roe v. Anderson,

134 F.3d 1400, 1402 (9th Cir. 1998). “‘These two formulations represent two points on a sliding

scale in which the required degree of irreparable harm increases as the probability of success

decreases.’” Roe, 134 F.3d at 1402 (quoting United States v. Nutri-cology, Inc., 982 F.2d 394,

397 (9th Cir. 1992)); accord Sun Microsystems, 188 F.3d at 1119. “Thus, ‘the greater the

relative hardship to the moving party, the less probability of success must be shown.’” Sun

Microsystems, 188 F.3d at 1119 (quoting National Ctr. for Immigrants Rights v. INS, 743 F.2d

1365, 1369 (9th Cir. 1984)). Under the second standard, “‘serious questions’ refers to questions

which cannot be resolved one way or the other at the hearing on the injunction and as to which

the court perceives a need to preserve the status quo lest one side prevent resolution of the

questions or execution of any judgment by altering the status quo.” Gilder v. PGA Tour, Inc.,

936 F.2d 417, 422 (9th Cir. 1991) (quoting Republic of Philippines v. Marcos, 862 F.2d 1355,

1362 (9th Cir. 1988) (en banc)). Furthermore, “serious questions” are substantial, difficult, and

doubtful, as to make them a fair ground for litigation and thus for more deliberate investigation.” 

Id. 

For the reasons set forth in the official transcript of proceedings, the Court finds plaintiff

has demonstrated, with admissible evidence, that it will suffer irreparable harm if the Special

Meeting for Shareholders is held on December 21, 2007, because notice of the Special Meeting

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07cv2344

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and the Proxy Statement was not provided to all shareholders in violation of Section 14(a) and

ARS § 10-705. The Court further finds that the likelihood of success on the merits and the

balance of harm tip in plaintiff’s favor. Finally, the public interest is best protected by

enforcement of Section 14(a) which is intended to prevent management from obtaining

authorization of corporate action through inadequate disclosures in proxy solicitation and to

“safeguard the corporate suffrage of shareholders.” Ash v. GAF Corp., 546 F. Supp. 89, 92

(D.C. Penn. 1982). 

 Based on the foregoing and for the reasons more fully set forth in the Court’s official

transcript of proceedings, plaintiff’s ex parte application for a TRO is GRANTED. Defendant

is hereby ENJOINED and RESTRAINED from holding a Special Meeting of the shareholders

on December 21, 2007, or at any other time until the preliminary injunction hearing in this

matter is heard.

IT IS FURTHER ORDERED:

1. Plaintiff shall post a bond in the amount of $10,000.00 within 48 hours of the

filing of this Order. 

2. That defendant shall show cause why a preliminary injunction should not issue on

Monday, January 7, 2008 at 10:30 a.m. in Courtroom 14.

3. That defendant shall file and serve on opposing counsel an opposition to the

application for a preliminary injunction not later than December 28, 2007. If

plaintiff desires to file a reply memorandum to defendant’s opposition, it must file

and serve its reply not later than January 3, 2008.

IT IS SO ORDERED.

DATED: December 18, 2007

M. James Lorenz

United States District Court Judge

COPY TO: 

HON. RUBEN B. BROOKS

UNITED STATES MAGISTRATE JUDGE

ALL PARTIES/COUNSEL

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