Scott unilaterally authorized Inofast to award Mr. Miller a bonus in excess of $ 21,000 to cover the cost of the shares and the related taxes. Tr., 1/3/96, p. 50.
23. Leigh did not receive his shares until 1992, shares which came to him by way of a gift from the corporation. Tr., 1/3/96, p. 77. This transaction occurred as a result of a meeting attended by only Scott and Leigh. Tr., 1/3/96, p. 57.
24. Prior to the 1993 shareholders' meeting, Scott unilaterally caused the corporation to issue 2,142.857 shares to himself. Tr., 1/3/96, p. 149-50.
25. Thus, Scott caused 12,857 additional shares to be issued without Norman's knowledge or approval. These shares were voted in such a manner as to allow Scott to gain control of the board of directors. Tr., 1/3/96, pp. 149-50.
26. Following the 1993 shareholders' meeting, Scott caused Inofast to issue an additional 5,359 bonus shares to himself, bringing his total to 18,751.857 shares, 1.857 more shares than Norman's interest. This transaction occurred pursuant to a shareholders' meeting held on October 19, 1993, attended by Leigh and Scott. Norman, who was in Austria, had requested an agenda prior to the meeting, but his request went unanswered. Tr., 1/3/96, pp. 38-40.
27. On December 2, 1993, Norman initiated a declaratory judgment action in the Court of Common Pleas of Montgomery County regarding the ownership of Inofast. This suit was subsequently withdrawn. Tr., 10/5/95, p. 66.
28. On June 16, 1994, Norman commenced a second suit in Montgomery County, making claims for (1) injunctive and declaratory relief; (2) violation of fiduciary duties; (3) fraud and misrepresentation; and (4) violation of the Pennsylvania Business Corporation Law. On June 17, the court issued an injunction enjoining the defendants from performing major corporate functions. The parties have complied with this injunction. The Montgomery County action remains pending.
In the instant motion, Norman asks this Court for an injunctive order to (1) appoint independent counsel to represent Inofast; (2) set aside the elections of Inofast officers and directors conducted during the previous three annual shareholders' meetings; and (3) order that Inofast conduct its affairs as if Norman controlled 62.5% of the 30,000 outstanding and issued shares. In weighing Norman's request, we are mindful that injunctive relief is an extraordinary remedy that should be granted only in limited circumstances. Frank's GMC Truck Center, Inc. v. General Motors Corp., 847 F.2d 100, 102 (3d Cir. 1988). Thus, the onus is on the movant to show by sufficient evidence that (1) he is likely to succeed on the merits; (2) he will suffer irreparable harm if relief is denied; (3) the granting of injunctive relief will not result in greater harm to the adverse party; and (4) the granting of injunctive relief is in the public interest. Campbell Soup Co. v. ConAgra, Inc., 977 F.2d 86, 90-91 (3d Cir. 1992); Orson, Inc. v. Miramax Film Corp., 836 F. Supp. 309, 311 (E.D. Pa. 1993).
Upon review of the evidence presented at the hearing viewed in light of the standard articulated above, we conclude that injunctive relief is unwarranted. Specifically, we find that Norman has failed to convince us that he will suffer irreparable harm if relief is denied.
Norman argues that Inofast's fiscal condition has declined precipitously under Scott's stewardship, and that he is at risk in that he has personally guaranteed one half of Inofast's debt. Moreover, he contends that "if provisional action is not taken and taken quickly to address the declining financial situation at Inofast, there might not be a Company at all at the conclusion of this litigation for Plaintiff to regain control over. . . ." Plaintiff's Memo. at 7 (emphasis added).
Unfortunately for Norman, this is precisely the type of harm for which there is no injunctive remedy. The cases make clear that injunctive relief is unwarranted where the harm will occur, if at all, only in the indefinite future. Indeed, our Court of Appeals requires that there be a "clear showing of immediate irreparable harm" before an injunction may issue. Campbell Soup, 977 F.2d at 91 (citation and internal quotation omitted). Moreover, the harm must rise to a level beyond serious and substantial harm; and it must be of a nature so peculiar that money alone cannot compensate for it. ECRI v. McGraw-Hill, Inc., 809 F.2d 223, 226 (3d Cir. 1987); Orson, 836 F. Supp. at 311.
Here, the harm that animates Norman's request for relief, as he concedes in the emphasized excerpt from his Memorandum quoted above, is speculative, and not immediate. Norman has presented evidence of Inofast's financial decline, but not of its imminent collapse. Indeed, Defendants have presented some evidence to suggest that Inofast's financial state is improving. Moreover, the damages that Norman either has suffered or may suffer are not irreparable, but are instead measurable and compensable monetarily. Thus, the harm alleged here is ill-suited for an injunctive remedy. Finally, we note that Norman has failed to present evidence to suggest that Scott's leadership has caused the financial problems at Inofast, or that its fiscal condition would improve if the company's reins were placed in Norman's hands. For these reasons, we conclude that an injunctive remedy here is inappropriate. Accordingly, we enter the following
CONCLUSIONS OF LAW
1. This Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 1331 and 1367.
2. Plaintiff has failed to show by sufficient evidence that he will suffer irreparable harm if the instant motion is denied.
3. Accordingly, Plaintiff's Motion for a Preliminary Injunction will be denied.
An appropriate order follows.
AND NOW, this 12Th day of February, 1996, upon consideration of Plaintiff's Motion for a Preliminary Injunction, and the response thereto, and after a hearing on this matter on October 5, 1995 and January 3, 1996, it is hereby ORDERED, for the reasons set forth in the preceding Memorandum, that said Motion is DENIED.
J. Curtis Joyner, J.