In the

United States Court of Appeals

For the Seventh Circuit ____________________

No. 14-3133

COMMODITY FUTURES TRADING COMMISSION,

Plaintiff-Appellee,

v.

NIKOLAI S. BATTOO, et al.,

Defendants.

Appeal of:

HADLEY CHILTON and JOHN J. GREENWOOD, as Liquidators 

of certain investment funds registered in the British Virgin Islands

____________________

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 12 C 7127 — Edmond E. Chang, Judge.

____________________

ARGUED APRIL 21, 2015 — DECIDED JUNE 23, 2015

____________________

Before EASTERBROOK and RIPPLE, Circuit Judges, and 

REAGAN, District Judge.

*

 * Of the Southern District of Illinois, sitting by designation.
2 No. 14-3133

EASTERBROOK, Circuit Judge. The Commodity Futures 

Trading Commission and the Securities and Exchange 

Commission have concluded that Nikolai Battoo committed 

fraud. Battoo and his companies, all located outside the 

United States, have defaulted in the two agencies’ suits, and 

the district judge froze all assets they controlled pending a 

final decision about who owns what. Given the defaults, that 

preliminary injunction was issued without an adversarial 

presentation. The district court appointed a Receiver to marshal the remaining assets and try to determine ownership; 

the Receiver has been recognized as the assets’ legitimate 

controller in several other nations, including China (Hong 

Kong), Guernsey, and the Bahamas.

Battoo defied the injunction and transferred control of 

some investment vehicles, located in the British Virgin Islands, to court-appointed Liquidators, who asked the district 

judge to modify the injunction and allow them to distribute 

assets immediately. (The assets in question are located in the 

United States or England, where the funds had placed them, 

and thus are effectively controlled by the Receiver while the 

injunction lasts.) The Liquidators maintain that, because Battoo no longer calls the shots, the justification for freezing the 

assets has lapsed. The district court assumed that even 

though Battoo had arranged for the Liquidators’ appointment, they are now under judicial control. Still, it declined to 

modify the injunction, ruling that the funds should remain 

available so that an eventual master plan of distribution can 

treat all investors equitably. The Liquidators contend that we 

should order all of the assets that passed through the British 

Virgin Islands funds surrendered to their control immediately for prompt distribution under whatever system British 

Virgin Islands law specifies.
No. 14-3133 3

The CFTC alleges—and given the defaults we must assume—that Battoo persuaded approximately 800 persons 

throughout the world to invest about $340 million in his 

funds. Some 250 of these persons resided in the United 

States; they invested in commodity pools that Battoo styled 

Private International Wealth Management. Battoo solicited 

investments through materials distributed in this nation; the 

Liquidators do not deny that this subjected Battoo to the requirements of federal commodities and securities laws. This

is not necessarily a reason to disturb the distribution priorities of other nations’ investors, but the CFTC believes, and 

the district court provisionally found, that commingling of 

assets makes it hard to know whose money ended up in 

which vehicle.

According to the complaint, Battoo stole some of the investors’ money (fraud #1) and placed the rest in a web of 

funds, all of which he controlled directly or indirectly. He 

moved the money freely across funds, or from one portfolio 

to another within any given fund, in a way that made tracing 

of each investment difficult. In 2008 Phi R Master, one of the 

funds, suffered significant losses, which Battoo hid from 

both current investors and potential new investors (fraud 

#2). Later in 2008 several funds sustained further losses 

when it came to light that Bernard Madoff (with whom between 7% and 20% of each Battoo fund’s assets had been 

placed) had been running a Ponzi scheme. Yet Battoo told 

existing and potential new investors that “the current 

Madoff situation will have practically no impact to [sic] its 

portfolios” (fraud #3). In September 2009 Battoo provided 

some investors with false verifications of their assets’ value

(fraud #4), and in late 2011 he suspended redemptions after 

falsely telling investors that the collapse of commodity bro-
4 No. 14-3133

ker MF Global, Inc., prevented operations (fraud #5, since 

Battoo’s funds did not depend on MF Global, whose failure 

had no material effect on their status). Even without transfers among the funds, this sequence shows the potential difficulty in sorting out who owns what, because investments 

that preceded any given fraud would be affected differently 

from investments made later. This is a simplified version of 

the CFTC’s allegations; more detail is not necessary to understand the district court’s decision and the Liquidators’ 

appeal.

In denying the Liquidators’ motion, the district judge observed that releasing the assets would lead to distribution, a 

step that the judge thought premature because the Receiver 

has yet to ascertain all investors’ interests in each particular 

fund and propose a plan about how the losses will be shared 

across the different groups of investors. The judge stated repeatedly that it remains to be determined who gets what—

and that the Liquidators, like any other interested party, will 

be entitled to full judicial review (by the district judge and 

the court of appeals) before the Receiver’s eventual proposal 

is implemented.

The Liquidators’ appeal reflects a view that there is no 

reason to keep funds frozen now that Battoo is no longer in 

control. One could say the same, we suppose, for all funds 

under the Receiver’s management, but no one would think 

that this implies that the Receiver should distribute the 

funds immediately. Who owns what, and how the frauds affected each investment’s value, need to be worked out. The 

Liquidators are confident that they know the answers to 

those questions, at least for the British Virgin Islands funds, 
No. 14-3133 5

but they have not demonstrated that the district judge is 

obliged to share their optimism.

The Liquidators tell us that a court should grant a motion 

to modify a preliminary injunction when the movant “has 

demonstrated that changed circumstances make the continuation of the injunction inequitable.” Winterland Concessions 

Co. v. Trela, 735 F.2d 257, 260 (7th Cir. 1984). It is not clear to 

us that this is the right standard. It parallels Fed. R. Civ. P. 

60(b)(5), which says that a district judge may modify a 

judgment when “applying it prospectively is no longer equitable”. See also, e.g., Rufo v. Inmates of Suffolk County Jail, 502 

U.S. 367 (1992); Horne v. Flores, 557 U.S. 433 (2009). Yet Rule 

60(b) as a whole governs requests to modify final decisions. 

The district court has not made a final decision in this litigation. On the way to final decisions, district judges usually 

may modify their tentative views. Certainly when crafting a 

final injunction, a district judge is not stuck with the preliminary order in the absence of a finding that it is “inequitable”; the judge is not constrained at all by the preliminary 

disposition when selecting the final remedy.

At the same time, the fact that a final injunction lies 

ahead reduces the cost of sticking with the preliminary injunction. Preliminary relief will be superseded by the final 

decision. Instead of devoting resources to refining an interim 

order, a district judge is entitled to spend available time figuring out whether permanent relief is justified and, if so, 

what its terms should be. Fiddling with a preliminary injunction’s terms may do damage if it postpones the final decision. We do not doubt, however, that a district judge has 

discretion to revise a preliminary remedy if persuaded that 

change had benefits for the parties and the public interest.
6 No. 14-3133

We need not decide whether the “no longer equitable” 

standard applies to preliminary injunctions. The CFTC contends that judges should look for “a change in ‘the totality of 

the circumstances’ surrounding” the events, and as we’ve 

just mentioned there are other possibilities too. No matter 

the standard, we must ask whether the district court abused 

its discretion by leaving the injunction as originally written.

See, e.g., Horne, 557 U.S. at 447.

We do not see any abuse here—in part for the reason the 

district judge gave (that it is too soon to know whether the 

Liquidators are right to think that some investment interests 

can be disentangled reliably from those affected by Battoo’s 

frauds against U.S. investors) and in part because there are 

no apparent costs to waiting. The Liquidators have not argued that any investor suffers from delay. If the Receiver 

were investing the funds poorly, then releasing them (or 

reaching a final decision with dispatch) might be necessary 

to prevent further injury to the investors. But the Liquidators 

have not argued that any investor is suffering loss as a result 

of the Receiver’s investment decisions. And if there is both a 

potential for gain, and no potential for loss, from keeping the 

assets in the Receiver’s hands for now, it cannot be an abuse 

of discretion for the district court to do just that.

AFFIRMED