What happens when a married couple is divorcing, owns a business and is disputing who controls it—and the assets? One legal remedy that can help is an injunction.
What’s An Injunction?
Injunctions are often sought when actions need to be halted—or at least paused—while issues are being assessed and resolved. As Farrell Fritz Attorneys explains:
An injunction is a kind of court order. It usually comes in the form of a prohibition against a person or entity acting in a particular way (for example, in a business divorce case, from drawing funds from corporate accounts). Less frequently, it can come in the form of a mandate to do or engage in certain conduct (for example, in a business divorce case, to provide ongoing access to corporate books and records).
Injunctive relief comes in “three sizes”—based on the timeframes involved: temporary—which is often referred to as a temporary restraining order (TRO); preliminary; and permanent.
Preliminary Injunction Exemplified
Marital divorce cases can be messy enough even before adding in maneuvers related to joint business management—and the related financial decisions. Sadly, the same can also happen in “business divorce”cases in which partners have decided to discontinue working together. Legal experts observe that these clients often arrive in the midst of a crisis—raging over “siphoning, depleting, or denying access to company assets and resources….”
In these instances, preliminary injunctions can be very helpful. Investopedia provides this example:
An example of a preliminary injunction might be when a married couple owns a business and is going through a divorce. Perhaps there is a dispute as to who owns or controls the business and its assets. If the husband tried to make unilateral business decisions, the wife might file for a temporary injunction to prevent certain business activities from taking place until the court has decided the ownership issue.
What Are Injunction Bonds?
Though state laws differ, frequently, when issuing an injunction order, courts can require the party seeking it to secure an injunction bond (also referred to as a TRO bond). This is a type of surety bond.
Essentially, an injunction bond obligates payment of costs and damages incurred if the court later determines that the injunction order was unnecessary. The amount of the injunction bond is set by the court, along with the deadline for securing the bond.
Colonial Surety Company , a leading, national provider of surety bonds, offers an efficient, direct and digital way to obtain an Injunction/TRO Bond. Simply get a quote online; fill out your information; and, enter your payment method. Print or e-file the bond from anywhere—even the courthouse.
When Money Is An Insufficient Remedy
Injunctions can be especially useful for situations in which money alone cannot prevent harm. Investopedia notes:
For example, in addition to making a financial judgment against a defendant, a court might issue a permanent injunction ordering that the defendant does not participate in a certain activity or business.
Although injunctions can be very useful remedies when properly applied, state laws specifying their use must be carefully followed.
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