Amini LLC successfully defended Automaton, Inc. against a preliminary injunction motion filed with the appellate division, first department, seeking to compel the issuance of preferred equity to a convertible noteholder that had served a conversion notice. The preferred equity had not been authorized by the company’s charter. The principal defense focused on the application of UCC 8-210, which addresses “overissue”. We argued that the appropriate remedy under UCC 8-210(d) was monetary compensation, not the forced issuance of new equity, given that Automaton is a nonpublic company.
The appellate division agreed with our position and denied the motion.
Appellate division order linked here.