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Credit Europe Bank, N.V. v. Tuspa Trade, LLC

United States District Court, D. Nevada

April 6, 2017

TUSPA TRADE, LLC, Defendant.



         Before the court is plaintiff Credit Europe Bank, N.V.'s (“CEB”) motion for a preliminary injunction. ECF No. 7. Defendant Tuspa Trade, LLC (“Tuspa”) filed an opposition (ECF No. 22) to which CEB replied (ECF No. 26). Along with its reply, CEB filed evidentiary objections to certain declarations submitted in support of Tuspa's opposition. ECF No. 27.

         I.Facts and Procedural Background

         At its core, this is a fraudulent transfer action brought under NRS § 112.180 for the fraudulent transfer of stock shares by non-party Hasmet Bedii Kurum (“Mr. Kurum”), an individual and Turkish citizen, to defendant Tuspa Trade, LLC (“Tuspa”), a Nevada limited liability company. See ECF No. 1.

         Plaintiff Credit Europe Bank, N.V. (“CEB”) is an international bank incorporated in the Netherlands with its principal place of business in Amsterdam. On or about January 25, 2013, CEB entered into a credit agreement with non-parties Kurum International S.H.A. (“Kurum International”), an Albanian company, and Kurum Demir Sanayi Dis Ticaret A.S. (“Kurum Demir”) (collectively “borrowers”), a Turkish company, known as the Framework Credit Agreement.[1] Pursuant to the credit agreement, CEB agreed to extend borrowers €10, 000, 000.00 in uncommitted credit. Borrowers' performance under the credit agreement was guaranteed by Mr. Kurum and non-party Kurum Holding A.S., an Albanian company (collectively “guarantors”).[2] Mr. Kurum is the owner/director of all the various entities.

         Under the credit agreement and guarantee, the borrowers and guarantors pledged all corporate and individual assets to CEB and specifically agreed that no party would transfer any asset without CEB's written approval. See ECF No. 1, Ex. A. Further, the credit agreement provided that a default of the agreement would occur if any of the parties (1) ceased to exist; (2) ceased business operations; or (3) underwent any court ordered liquidation or reorganization. Id. On June 1, 2015, the parties entered into a First Supplemental Agreement to the credit agreement through which CEB agreed to increase the line of uncommitted credit from €10, 000, 000.00 to €20, 000, 000.00.[3]

         On or about February 26, 2016, CEB sent a notice of default notifying all parties that an event of default had occurred under the loan agreement and that repayment of all amounts disbursed under the credit agreement were now due.[4] The underlying event of default was the bankruptcy filing of borrower Kurum Demir in Turkey. A second notice of default was sent to all parties on or about March 4, 2016.[5] This second notice identified an additional event of default; the bankruptcy filing of borrower Kurum International in Albania. Neither the borrowers (who have filed for bankruptcy) nor the guarantors have responded to CEB's notices of default nor repaid any of the outstanding debt due under the credit agreement. At this time, the amounts owed under the credit agreement are €11, 109, 323.00 and $5, 194, 816.40.[6]

         Prior to either event of default, but after he had signed the guarantee of the credit agreement, Mr. Kurum, along with another associate, Serafattin Ismail Kirpikli (“Mr.Kirpikli”), formed defendant Tuspa on or about November 3, 2014. Mr. Kurum was the founding member and operating manager of Tuspa at the time it was incorporated. On or about January 26, 2015, during the time borrowers were drawing millions on the credit agreement, Mr. Kurum entered into a gift agreement with Tuspa. The gift agreement was entered into by Mr. Kurum both individually and on behalf of Tuspa. Through the gift agreement, Mr. Kurum transferred 100% of the stock shares in a company known as Kosova e Re Sh. p.k. (“Kosova”), an insurance company in the Republic of Kosovo, to Tuspa for no monetary compensation. This transfer of shares was allegedly done without CEB's knowledge and without CEB's express written consent and approval.

         On or about June 2016, Mr. Kirpikli allegedly acquired Tuspa and became the operating manager. While manager of Tuspa, Mr. Kirpikli entered into a transaction with Fitorja SH.P.K (“Fitorja”), a Kosovo company, for the purchase of Tuspa. On November 10, 2016, Fitorja purchased Tuspa for €2, 100, 000.00. As of now, Fitorja is allegedly the current owner of defendant Tuspa.

         On February 28, 2017, CEB filed the underlying complaint against Tuspa alleging a single cause of action for fraudulent transfer in violation of NRS § 112.180. ECF No. 1. In its complaint, CEB seeks avoidance of the transfer of Kosova shares from Mr. Kurum to Tuspa and attachment of the shares to CEB. Id. Along with its complaint, CEB filed an ex parte application for a temporary restraining order (ECF No. 4) and motion for a preliminary injunction (ECF No. 7) seeking to enjoin defendant Tuspa from transferring, selling, or in any way relieving itself of the Kosova shares during the pendency of this action. Also on February 28, 2017, the court issued an order granting CEB's ex parte application for a temporary restraining order and setting a hearing on the request for a preliminary injunction.[7] ECF No. 8.

         II. Legal Standard

         A court may grant a preliminary injunction upon a showing of: (1) irreparable harm to the petitioning party; (2) the balance of equities weighs in petitioner's favor; (3) an injunction is in the public's interest; and (4) the likelihood of petitioner's success on the merits. See Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 129 S.Ct. 365, 376, 172 L.Ed.2d 249 (2008) (citations omitted). In Winter, the Supreme Court stated that a “likelihood” is required as to all four factors. See 555 U.S. at 22. The Ninth Circuit has since interpreted the Winter decision as being compatible with a sliding scale, under which a party may satisfy the requirements for an injunction with a lower showing under one factor if there is a very strong showing under another. See Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011). Under the sliding scale approach, the Ninth Circuit has determined that “serious questions” as to the merits would satisfy the “likelihood of success” requirement in the event of a strong showing of irreparable harm. Id.

         III. Discussion

         A. Likelihood of ...

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