Court Opinion

ID: 2975996
Source: CourtListenerOpinion
Date Created: 2015-09-22 17:43:43.914666+00
Date Added: 2024-06-11T11:43:59.617137
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                                      File Name: 07a0482p.06

                    UNITED STATES COURT OF APPEALS
                                  FOR THE SIXTH CIRCUIT
                                    _________________

                                                      X
                                                       -
 JPMORGAN CHASE BANK, N.A., as Administrative

                               Plaintiff - Appellee, -
 Agent,
                                                       -
                                                       -
                                                           No. 07-1096

                                                       ,
           v.                                           >
                                                       -
 LARRY J. WINGET and the LARRY J. WINGET LIVING -
                                                       -
                            Defendants-Appellants. -
 TRUST,

                                                       -
                                                      N
                       Appeal from the United States District Court
                      for the Eastern District of Michigan at Detroit.
                       No. 05-74141—Avern Cohn, District Judge.
                                   Argued: November 1, 2007
                            Decided and Filed: December 14, 2007
                   Before: SILER, MOORE, and GILMAN, Circuit Judges.
                                      _________________
                                           COUNSEL
ARGUED: John E. Anding, DREW, COOPER & ANDING, Grand Rapids, Michigan, for
Appellants. Melville W. Washburn, SIDLEY AUSTIN, Chicago, Illinois, for Appellee.
ON BRIEF: John E. Anding, Thomas V. Hubbard, DREW, COOPER & ANDING, Grand Rapids,
Michigan, for Appellants. Melville W. Washburn, Matthew A. Clemente, Larry J. Nyhan, Kevin
C. Pecoraro, Brian D. Rubens, SIDLEY AUSTIN, Chicago, Illinois, William T. Burgess,
DICKINSON WRIGHT, Detroit, Michigan, for Appellee.
                                      _________________
                                          OPINION
                                      _________________
        RONALD LEE GILMAN, Circuit Judge. Through a series of transactions between 1999 and
2002, JPMorgan Chase Bank and its predecessor served as agent for a number of lenders that had
advanced credit to Venture Holding Company LLC, a company owned by Larry J. Winget and the
Larry J. Winget Living Trust (hereafter collectively referred to as Winget). JPMorgan, on the basis
of the various agreements between the parties, sought to inspect the financial records of two other
companies owned by Winget after Venture filed for bankruptcy. The district court granted
JPMorgan’s request for specific performance of the bank’s inspection rights, a decision that Winget
has appealed. For the reasons set forth below, we AFFIRM the judgment of the district court.

                                                1
No. 07-1096           JPMorgan Chase Bank v. Winget et al.                                      Page 2

                                       I. BACKGROUND
A.     Factual background
       1.      The parties’ relationship
        In October of 2002, JPMorgan and Winget entered into the Eighth Amendment of the Credit
Agreement between the lenders and Venture. A guaranty of payment (Winget Guaranty) was
executed pursuant to the Eighth Amendment, which memorialized Winget’s personal guarantee of
Venture’s obligations under the Credit Agreement. Winget also entered into two pledge agreements
(Winget Pledges) in conjunction with the Winget Guaranty, whereby Winget pledged all of the
present and future stock in two other companies owned by Winget—P.I.M. Management Co.
(P.I.M.) and Venco #1, LLC (Venco). Finally, P.I.M. and Venco executed guaranties that were
similar to the Winget Guaranty and the Winget Pledges (P.I.M. Guaranty and Venco Guaranty).
        Venture and a number of Winget’s other companies later filed for bankruptcy. Following
the sale of various assets of the bankrupt companies, Venture’s outstanding debt under the Credit
Agreement stood at approximately $350 million. On September 21, 2005, JPMorgan, through its
counsel, sent a letter to Winget requesting inspection of his personal financial records and the
financial records of P.I.M. and Venco pursuant to the terms of the Winget Guaranty. Winget, on
October 5, 2005, denied JPMorgan’s request.
       2.      Relevant contractual provisions
      At issue in this appeal is the inspection covenant set forth in § 11(d)(i) of the Winget
Guaranty. This section provides in pertinent part as follows:
       Each of the Guarantor Controlled Companies will permit the Administrative Agent,
       by its representatives and agents, to inspect any of the Property, corporate books and
       financial records of such Guarantor Controlled Company, . . . to examine and make
       copies of the books and accounts and other financial records of such Guarantor
       Controlled Company, and to discuss the affairs, finances and accounts of such
       Guarantor Controlled Company with, and to be advised as to the same by, their
       respective officers at such reasonable times and intervals as the Administrative
       Agent may designate . . . .
This inspection covenant is one of a series of covenants that govern the actions that may be taken
with respect to Winget’s companies, including P.I.M. and Venco. These covenants include
restrictions on (1) the declaration and payment of dividends (§ 11(d)(ii)), (2) the incurring of
indebtedness (§ 11(d)(iii)), (3) mergers and consolidations (§ 11(d)(iv)), (4) investments and
acquisitions (§ 11(d)(v)), (5) the creation of liens (§ 11(d)(vi)), and (6) transactions with specific
affiliated entities (§ 11(d)(vii)). The Winget Guaranty states that Winget “will cause the Guarantor
Controlled Companies to comply with each of the . . . covenants.”
        Another portion of the Winget Guaranty that is relevant to this appeal is § 3, which sets out
the limits on JPMorgan’s potential recovery under the Credit Agreement:
       [N]o action will be brought for the repayment of the Guaranteed Obligations under
       this Guaranty and no judgment therefor will be obtained or enforced against Larry
       Winget other than with respect to the Pledged Stock in accordance with the
       provisions of the related pledge agreements, provided that the Guarantor shall be
       fully and personally liable for any damages arising from any violations of any of the
       agreements of the Guarantor herein in favor of the Lenders. No action for money
       judgment shall be commenced by the Administrative Agent arising from any alleged
No. 07-1096           JPMorgan Chase Bank v. Winget et al.                                     Page 3

       violation of the covenants contained in Section 11(d) until the completion of
       collection and liquidation efforts (as described in Section 5.2 of the Pledge
       Agreement of Guarantor as to PIM), unless there is a good faith allegation of
       material and irreparable harm. However, an action for specific performance and/or
       injunctive relief can be brought at any time following an alleged violation.
        Although § 3 of the Winget Guaranty references only the P.I.M. Pledge, § 5.2 of both the
P.I.M. Pledge and Venco Pledge contain identical language regarding any collection action against
the pledged stock. These sections provide in pertinent part that
       [n]otwithstanding anything herein or elsewhere to the contrary, the Agent shall not
       exercise any rights or remedies under this Pledge Agreement until all reasonable
       efforts have been made by it to collect the Obligations from other collateral held by
       the Agent . . . , it being intended that the Collateral provided by this Pledge
       Agreement . . . shall be realized upon by the Agent only as a last resort.
The “other collateral” that must first be pursued by JPMorgan is not defined in the Winget Guaranty,
but the pledged stock of P.I.M. and Venco are explicitly excluded from the contemplated “other
collateral.” An almost identical “reasonable efforts” provision appears in § 3(iii) of both the P.I.M.
and Venco Guaranties. Finally, pursuant to § 10 of the Winget Pledges, Winget can obtain a release
of the P.I.M. and Venco stock by paying JPMorgan “not less than $50,000,000” to satisfy each
pledge.
B.     Procedural background
         In Count I of the Complaint, JPMorgan requests an order for specific performance under the
Winget Guaranty, requiring Winget to comply with the inspection requests outlined in its September
21, 2005 letter. Winget filed both an Answer, raising affirmative defenses, and a Counterclaim,
which was subsequently amended. JPMorgan moved to dismiss the amended Counterclaim. The
district court eventually dismissed the Counterclaim without prejudice and permitted Winget to
assert those claims in a new, related case, which Winget did.
        JPMorgan then moved for judgment on the pleadings pursuant to Rule 12(c) of the Federal
Rules of Civil Procedure. In its motion, JPMorgan sought to have Winget’s affirmative defenses
stricken and requested a final judgment as to its request for specific performance. The district court
granted JPMorgan’s request for specific performance and ruled that the affirmative defenses would
be litigated as part of the companion case initiated on the basis of Winget’s former Counterclaim.
        At the request of the district court, both parties submitted proposed orders that would
implement the specific performance of JPMorgan’s inspection right. JPMorgan’s proposed order
was adopted, which the district court subsequently modified to protect Winget’s right to assert his
Fifth Amendment privilege against self incrimination in other proceedings. The district court also
entered a protective order that restricts the use of any confidential material produced during the
inspection process. On appeal, Winget argues that the district court erred by (1) failing to apply the
“reasonable efforts” provision to JPMorgan’s inspection rights, and (2) granting an overly broad
order of specific performance.
                                          II. ANALYSIS
A.     Standard of review and applicable substantive law
       We review de novo a judgment on the pleadings granted pursuant to Rule 12(c) of the
Federal Rules of Civil Procedure, using the same standard as applies to a review of a motion to
dismiss under Rule 12(b)(6). Roger Miller Music, Inc. v. Sony/ATV Publishing, LLC, 477 F.3d 383,
No. 07-1096           JPMorgan Chase Bank v. Winget et al.                                      Page 4

389 (6th Cir. 2007). “For purposes of a motion for judgment on the pleadings, all well-pleaded
material allegations of the pleadings of the opposing party must be taken as true, and the motion may
be granted only if the moving party is nevertheless clearly entitled to judgment.” Southern Ohio
Bank v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 479 F.2d 478, 480 (6th Cir. 1973). But we
“need not accept as true legal conclusions or unwarranted factual inferences.” Mixon v. Ohio, 193
F.3d 389, 400 (6th Cir. 1999). A Rule 12(c) motion “is granted when no material issue of fact exists
and the party making the motion is entitled to judgment as a matter of law.” Paskvan v. City of
Cleveland Civil Serv. Comm’n, 946 F.2d 1233, 1235 (6th Cir. 1991).
         Jurisdiction in the present case is based on diversity of citizenship. “In diversity cases such
as this, we apply state law in accordance with the controlling decisions of the state supreme court.”
Allstate Ins. Co. v. Thrifty Rent-A-Car Sys., Inc., 249 F.3d 450, 454 (6th Cir. 2001). Accordingly,
we apply Michigan state law to the interpretation of the parties’ agreements and the district court’s
order of specific performance.
B.      The “reasonable efforts” provision
        Winget contends that JPMorgan’s inspection rights as set forth in § 11(d) of the Winget
Guaranty are subject to the “reasonable efforts” provisions of the Winget Pledges, P.I.M. Guaranty,
and Venco Guaranty. He advances this contention by arguing that the district court misapplied the
legal standard applicable to a judgment on the pleadings. According to Winget, “[u]nder 12(c), this
Court must accept as true [his] allegation that [JPMorgan] failed to use ‘all reasonable efforts’ to
obtain payment of the Guaranteed Obligations from the other collateral.” Winget also claims that
“in the context of [JPMorgan’s] Rule 12(c) motion, the district court was required to accept as true,
given the state of the pleadings, that [JPMorgan] was contractually barred from taking action that
would affect the rights of Venco and P.I.M.”
        We conclude that Winget’s argument is both a misapprehension of the proper analysis under
Rule 12(c) and an incorrect interpretation of the language of the Winget Guaranty. Although “all
well-pleaded material allegations of the pleadings of the opposing party must be taken as true,”
Southern Ohio Bank, 479 F.2d at 480, Winget’s assertion that JPMorgan was contractually barred
from exercising its inspection rights until it satisfied the “reasonable efforts” provision is a legal
conclusion, not a factual allegation. Accordingly, we are not required to accept Winget’s argument
as true. Mixon, 193 F.3d at 400. Winget repeatedly asserts that the district court erred because it
failed to accept his contention that JPMorgan had not used all “reasonable efforts” before seeking
to exercise its inspection rights. In fact, the district court made no such error, because the court
actually concluded that the “reasonable efforts” provision was inapplicable to JPMorgan’s
inspection rights as Agent.
        The proper interpretation of a contract is a question of law. Archambo v. Lawyers Title Ins.
Corp., 646 N.W.2d 170, 174 (Mich. 2002). Thus, whether the “reasonable efforts” provisions of
the P.I.M. Guaranty and the Venco Guaranty are applicable to the Agent’s inspection rights under
the Winget Guaranty is a legal question that may be decided on a motion for judgment on the
pleadings. According to Winget, § 3(iii) of the P.I.M. and Venco Guaranties limit JPMorgan’s
inspection rights under § 11(d) of the Winget Guaranty. Section 3(iii) provides that JPMorgan “shall
not exercise any rights or remedies under this Guaranty until all reasonable efforts shall have been
made by it to collect the Guaranteed Obligations from other collateral held by the Administrative
Agent.” Winget argues that because JPMorgan has failed to demonstrate that it has made “all
reasonable efforts” to collect from other collateral, it cannot exercise its inspection rights as Agent.
       The numerous, interrelated contracts governing the relationship between Winget and
JPMorgan are undoubtedly complex, and JPMorgan’s ability to seek certain forms of relief is
circumscribed by the provisions of the various agreements. For example, § 3 of the Winget
No. 07-1096           JPMorgan Chase Bank v. Winget et al.                                     Page 5

Guaranty provides that “[n]o action for money judgment shall be commenced by the Administrative
Agent arising from any alleged covenants contained in Section 11(d) until the completion of
collection and liquidation efforts (as described in Section 5.2 of the Pledge Agreement of Guarantor
as to PIM), unless there is a good faith allegation of material and irreparable harm.” If JPMorgan
were seeking a money judgment based on Winget’s response to its request to inspect the financial
records, this provision makes clear that JPMorgan must first complete the “collection and liquidation
efforts” set forth in § 5.2 and make a good-faith allegation of material and irreparable harm.
         The language related to JPMorgan’s inspection rights, in contrast, is consistent,
unambiguous, and not circumscribed by any similar limitation. The Winget Guaranty, the P.I.M.
Guaranty, and the Venco Guaranty each unequivocally state that, with respect to the inspection
rights, “an action for specific performance and/or injunctive relief can be brought at any time
following an alleged violation.” Winget argues that we must look to the intention of the parties, and
that the intention of the parties is clear from the contractual language. He specifically relies on
§ 3(iii) of both the P.I.M. and Venco Guaranties, where the parties state that they “intended that this
Guaranty and the collateral provided by the Pledge Agreement from the Guarantor . . . shall be
realized upon by the Administrative Agent only as a last resort.”
        In other words, Winget contends that JPMorgan may seek recovery from P.I.M. and Venco
only if no other assets are reasonably available. But JPMorgan is not seeking recovery from P.I.M.
and Venco. Rather, JPMorgan is simply seeking to exercise its right to inspect the financial records
of those two companies, a right that it may exercise through an action for specific performance “at
any time following an alleged violation.” Here the alleged violation is Winget’s denial of
JPMorgan’s request, sent by letter in September of 2005, to inspect the financial records of P.I.M.
and Venco.
       Moreover, the Winget Guaranty, upon which the instant action is based, contains no
“reasonable efforts” provision and no reference to recovery as a last resort. The absence of a
“reasonable efforts” provision is a compelling indication that the parties did not intend that any of
JPMorgan’s inspection rights under the Winget Guaranty would be circumscribed by such a
requirement. This interpretation is consistent with the stated intention of the P.I.M. and Venco
Guaranties that recovery must first be sought from other assets owned or controlled by Winget.
        Because the last sentence of § 3 of the Winget Guaranty explicitly permits JPMorgan to
exercise its inspection rights under § 11(d)(i) “at any time following an alleged violation,” we
conclude that the “reasonable efforts” provisions are inapplicable to such rights. JPMorgan was thus
entitled to a judgment on the pleadings on this issue.
C.     The specific performance order
        Winget has also raised a number of arguments related to the propriety of specific
performance as a remedy for JPMorgan’s alleged injury, and he challenges the scope of the district
court’s order. In particular, he claims that (1) JPMorgan failed to properly plead irreparable harm
and “clean hands,” (2) JPMorgan has not shown that Winget has the authority to produce the
financial records requested for inspection, and (3) the specific-performance order is improper
because it entangles the district court in the supervision of the inspection process and is unnecessary
because Winget can satisfy his obligations under the agreement through the payment of $50 million.
        Winget asserts that “Michigan law is settled that specific performance of a contract requires
the plaintiff to allege and prove that it will suffer irreparable harm from a breach such that damages
are not an adequate remedy.” Because JPMorgan failed to plead irreparable harm, Winget argues,
specific performance cannot be granted. This argument, however, misstates the elements of specific
performance under Michigan law.
No. 07-1096           JPMorgan Chase Bank v. Winget et al.                                      Page 6

        An inadequate remedy at law, not irreparable harm, is what must be alleged and proven in
a claim for specific performance. Laker v. Soverinsky, 27 N.W.2d 600, 601 (Mich. 1947) (“Specific
performance will not be decreed where there is an adequate remedy at law.”). Although one of the
cases cited by Winget, Barbers Local 552 v. Sealy, 118 N.W.2d 837, 839 (Mich. 1962), uses the
term “irreparable harm,” it uses the term as synonymous with the more commonplace “inadequate
remedy at law.” See Lamar v. Detroit Apartments Corp., 211 N.W. 643, 645 (Mich. 1927)
(explaining that specific performance “rests on the incompleteness or inadequacy of the remedy at
law as applied to the contract sought to be specifically enforced under the facts shown”).
       JPMorgan’s Complaint in this case states that
       [s]pecific performance is appropriate and necessary. The Agent will lack an
       adequate remedy at law if Winget, through his control of P.I.M. and Venco, engages
       in a liquidation, divestment, sale of assets, or any other course of action or dealing
       that results in a material diminution of the value of the foreign subsidiaries owned
       by P.I.M. and Venco. In addition, allegations of misconduct and financial
       manipulation made in numerous lawsuits currently pending against Winget raise
       concern as to whether Winget remains in compliance with the covenants referred to
       in ¶ 29 above. Only through inspection of the records and assets that form the basis
       of the pledged shares’ value can the Agent verify the value of its collateral and
       ensure that Winget has not violated the covenants contained in the Guaranty or
       otherwise compromised the pledged collateral and will not do so in the future.
In his Answer, Winget’s complete response to the above paragraph is: “Denied as untrue.” Winget
once again argues that the district court improperly applied the standard for judgment on the
pleadings with respect to JPMorgan’s assertion and Winget’s blanket denial. According to Winget,
the district court erred when it “ignor[ed] Winget’s denial [and] made the factual finding that
specific performance was the ‘only way’ for the Agent to enforce its ‘audit rights.’”
       Winget has again misapprehended the proper analysis under Rule 12(c). The issue of
whether JPMorgan has an adequate remedy at law that would make specific performance
inappropriate is a legal conclusion, not a factual determination. The facts underlying JPMorgan’s
request for specific performance are generally undisputed. Section 11(d) of the Winget Guaranty
contains a number of negative covenants that restrict the actions that can be taken by P.I.M. and
Venco during the existence of the Winget Guaranty. JPMorgan is also granted inspection rights in
§ 11(d) in order to ensure proper compliance with the covenants.
         By its letter dated September 21, 2005, JPMorgan sought to exercise its right of inspection.
Winget refused the request. These basic facts are alleged in the Complaint and are not refuted.
Winget attempts to argue that JPMorgan’s letter does not closely track the language of the inspection
provisions, but does not elaborate as to how exactly the letter and the provisions differ. In all
material respects, we find that the letter properly tracks the language of the inspection provisions.
The presence of the negative covenants applicable to Winget’s collateral, along with JPMorgan’s
letter and Winget’s response, support the conclusion that specific performance was proper in order
to ensure that JPMorgan can properly evaluate the condition of the pledged P.I.M. and Venco stock
and ensure compliance with the negative covenants.
        In the alternative, Winget argues that any possible harm to JPMorgan arising from a breach
of the Guaranty can be remedied through an award of monetary damages. But the only plausible
remedy for Winget’s failure to allow inspection is to order such inspection. The inspection rights
are essential to permit enforcement of the negative covenants listed in § 11(d) of the Winget
Guaranty. These covenants govern the collateral pledged by Winget, in the form of guaranties by
P.I.M. and Venco, and restrict the actions that can be taken with respect to those entities.
No. 07-1096           JPMorgan Chase Bank v. Winget et al.                                       Page 7

       Thus, contrary to Winget’s assertion that “the sole right of [JPMorgan] under those
documents is to enforce its security interest and apply the proceeds to satisfaction of the Guaranteed
Obligations,” JPMorgan has an explicit right to inspect the financial records of Winget and the
companies he controls in order to ensure that there is sufficient collateral to satisfy Winget’s debt
if JPMorgan needs to enforce its security interest at a later time. We therefore conclude that
JPMorgan lacks an adequate remedy at law to enforce its inspection rights under the Winget
Guaranty.
        Winget also asserts that specific performance is inappropriate because JPMorgan has failed
to demonstrate its “clean hands” in seeking specific performance. In support of this argument,
Winget cites to Rust v. Conrad, 11 N.W. 265, 267 (Mich. 1882), which states that equitable relief
is unavailable
       [i]f the contract is unequal; if he has bought land at a price which is wholly
       inadequate; if he has obtained the assent of the other party to unreasonable
       provisions; if there are any indications of overreaching or unfairness on his part, the
       court will refuse to entertain his case, and turn him over to the usual remedies.
Thus, “one who seeks the aid of equity must come in with clean hands.” Rose v. National Auction
Group, Inc., 646 N.W.2d 455, 463 (Mich. 2002) (quoting Stachnik v. Winkel, 230 N.W.2d 529, 532
(Mich. 1975)).
       Winget included specific allegations of unclean hands in both his Answer and in his amended
Counterclaim. In his Answer, Winget baldly asserts that “Plaintiff’s claims are barred based on
unclean hands.” The allegations of unclean hands in his amended Counterclaim relate to
JPMorgan’s actions during the bankruptcy of Venture. As such, these allegations cannot be said to
be “willful act[s] concerning the cause of action” presently before the court. Stachnik, 230 N.W.2d
at 534 (quoting Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806, 815
(1945)). Winget argues that the district court erred in ignoring these allegations in granting
judgment on the pleadings, but we conclude that Winget has not actually raised the issue of unclean
hands with respect to the specific performance of the inspection rights of the Winget Guaranty.
        Another argument briefly raised by Winget is that JPMorgan has not alleged that Winget has
any legal right to any of the financial information belonging to P.I.M. and Venco. We find this
argument meritless, if not disingenuous. Although Winget is correct in asserting that § 11(d)
provides that he will “cause” certain information to be produced, there is no requirement that
JPMorgan prove that Winget can actually produce the information. Winget entered into an
agreement wherein he promised to cause the production of the requested information from entities
that are explicitly referred to as “Guarantor Controlled Companies.” The language of the contract
speaks for itself. Winget cannot avoid the promise he made by arguing that before receiving
judgment on the pleadings, JPMorgan is required to prove that Winget can actually deliver on that
promise.
        Winget further contends that the order entered by the district court impermissibly involves
the court in supervision of the inspection process. Under Michigan law, “[s]pecific performance will
not be decreed where enforcement of the decree would require continuous judicial supervision.”
Edidin v. Detroit Econ. Growth Corp., 352 N.W.2d 288, 291 (Mich. Ct. App. 1984). But the
inspection requested by JPMorgan and ordered by the district court does not involve continuous
judicial supervision of the kind disfavored by the Michigan courts. For example, Michigan courts
have refused to order specific performance of a long-term joint commercial venture, id., or the
continued performance of laundry services throughout the term of a lease and its renewal, Laker v.
Soverinsky, 27 N.W.2d 600, 601 (Mich. 1947). But the inspection in the instant case is more
analogous to the limited discovery process commonly undertaken in the district courts. In the cases
No. 07-1096           JPMorgan Chase Bank v. Winget et al.                                        Page 8

cited by Winget, moreover, the trial court determined that its own resources would not be taxed by
the relief requested. Similarly, the district court here is in the best position to determine whether it
can properly supervise the inspection of the records it has ordered.
        An order has already been entered outlining the procedure for production and inspection of
the records. The district court has also entered a protective order designed to alleviate Winget’s
concerns about the misuse of confidential financial data. After carefully reviewing these orders, we
conclude that they do not impermissibly embroil the district court in the kind of continuous judicial
supervision disfavored by the Michigan courts.
        Finally, Winget argues that the district court’s order is “vain” because Winget can release
the pledged P.I.M. and Venco stock at any time through the payment of $50 million for each pledge.
The Michigan Supreme Court has stated that specific performance should not be granted where “one
of the parties might nullify its action through the exercise of a discretion which the contract or the
law invests him with.” Rust, 11 N.W. at 267. This standard has been explained as follows:
       In such situations it is obvious, of course, that there are corresponding benefits under
       the contract flowing from the first party to the second and from the second party to
       the first, which are parallel, continuous, contemporaneous and co-extensive and that,
       hence, termination of the contract by either party at any particular time would leave
       both in substantially status quo ante, thus resulting in no substantial injustice to
       either party.
Plastray Corp. v. Cole, 37 N.W.2d 162, 166 (Mich. 1949).
        The party seeking specific performance in Plastray had provided a large initial capital outlay
in anticipation of a future benefit. “In consequence, termination at any time by defendant might not
leave the parties in status quo ante and refusal to grant specific performance would, accordingly,
work a hardship and result in an injustice.” Id. On the other hand, this court has found specific
performance inappropriate when “the party requesting specific performance may, through the
exercise of discretion, terminate the contract.” Lowe’s Home Ctrs., Inc. v. LL & 127, LLC, 147 F.
App’x 516, 524 (6th Cir. 2005) (holding that the district court did not abuse its discretion in denying
the plaintiff’s request for specific performance where the “agreement [the plaintiff] is seeking to
enforce vests [the plaintiff] with the discretion to avoid performing under certain circumstances”).
         JPMorgan requested the order of specific performance but, unlike the plaintiff in Lowe’s,
it does not have the discretion to avoid performing under the Guaranty. Id. Rather, the present case
is more analogous to Plastray. 37 N.W.2d at 166. JPMorgan provided a significant initial capital
outlay in anticipation of future repayment by Winget. Moreover,Winget’s exercise of his partial
buyout option by paying $50 million per pledge “might not leave the parties in status quo ante.” See
id. In order to not “work a hardship . . . result[ing] in an injustice,” we conclude that the
specific-performance order is not “vain.” See id.
                                        III. CONCLUSION
       For all of the reasons set forth above, we AFFIRM the judgment of the district court.