Citations
- 757 F. Supp. 559
Full opinion text
FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER
DITTER, District Judge.
Plaintiff, American Trade Partners, L.P. (“ATP”), moves for a preliminary injunction against defendants, A-l International Importing Enterprises, Ltd., John G. Cassi-dy, Sr., Kevin P. Cassidy, Vincent G. Resti-vo, Francis R. Santangelo, and Premier International Importing Co., Inc. ATP seeks an order requiring defendants to notify purchasers of A-l’s or Premier’s goods to pay ATP directly, to account for ATP’s alleged loss in excess of $2,000,000, to disclose A-l’s and Premier’s books and records to ATP for inspection and photocopying, and to identify and to describe personal financial information. Most important, ATP requests that I freeze defendants’ assets to secure the availability of funds in the event a money judgment is entered against them in the future.
The amended complaint alleges ten causes of action: a request for a preliminary injunction (count I); violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1962(a), (b), (c), and (d) (counts IY, V, III, and II, respectively); breach of contract (count YI); conversion and fraud (count VII); breach of trust (count VIII); violations of New York’s fraudulent conveyance statutes, Debtor & Creditor Law §§ 273, 274, 275 and 276 (count IX); and tortious interference with contracts (count X).
Hearings on ATP’s motion for preliminary injunction were held on July 30, September 12, November 5, 6, and 7, 1990. The parties have fully briefed the motion for preliminary injunction. Additionally, I permitted the parties to submit proposed findings of fact and conclusions of law and post-hearing briefs.
As required by Fed.R.Civ.P. 52(a) and based upon the oral and documentary evidence, I make the following:
FINDINGS OF FACT
1. The court has jurisdiction over this action pursuant to 28 U.S.C. §§ 1331 and 1332 and 18 U.S.C. § 1961. Venue is properly laid in this court under 28 U.S.C. § 1391 and 18 U.S.C. § 1965.
2. ATP is a Delaware limited partnership with its principal place of business in Philadelphia, Pennsylvania.
3. Defendant A-l International Importing Enterprises, Ltd. (“A-l”) is a New York corporation with its principal place of business located in that state.
4. Defendant Premier International Importing Co., (“Premier”) is a New York corporation with its principal place of business located there.
5. Defendant John G. Cassidy, Sr. (“Jack Cassidy”) is a citizen of New York and was the president, a director, and a shareholder of A-l.
6. Defendant Kevin P. Cassidy is a citizen of New York and was the vice-president and treasurer, a director, and a shareholder of A-l.
7. Defendant Vincent G. Restivo is a citizen of New York and was the vice-president and secretary, a director, and a shareholder of A-l.
8. Restivo also participated in the formation of Premier and is its president and employee.
9. Defendant Francis R. Santangelo is a citizen of New York and was an organizer, a director, a promoter, an officer, and a shareholder of A-l.
10. Santangelo was an organizer and is the chief executive officer, a director, and a shareholder of Premier.
11. At all times relevant to this case, ATP was in the business of “factoring,” that is purchasing, at a discount, accounts receivables from clients in need of financing.
12. At all times relevant to this case, A-l imported merchandise from foreign countries for resale in the United States to “account debtors,” such as the Home Shopping Network (“HSN”). A-l used “factors” to fund its operations.
13. From its formation in January, 1990, Premier functioned similarly to A-l. Both companies imported similar goods from the same companies in Europe. They sold those goods to HSN.
14. Jack Cassidy directed the operation of A-l as its president. He participated in the formation of A-l, directed its financial affairs, supervised profit distributions, signed A-l’s checks, and submitted his own personal expenses for payment by A-l. He directed and controlled, in part, the disbursement of A-l’s money to ATP, to A-l’s shareholders, and to third parties on behalf of the shareholders to cover their personal expenses. He was also the liaison between A-l and ATP. From March 1, 1988, until mid-January, 1990, he arranged the transactions between the two companies and handled the paperwork necessary to complete each deal.
15. Kevin Cassidy was responsible for sales to HSN. He performed services for A-l at HSN’s offices in Florida and at A-l’s offices in New York. He participated in A-l’s formation, filled out orders for invoices, co-signed A-l’s checks with his father, Jack Cassidy, and submitted his personal expenses for payment by A-l. He also directed and controlled, in part, the disbursement of A-l’s money to ATP, to A-l’s shareholders, and to third parties on behalf of the shareholders to cover their personal expenses.
16. Restivo performed his services for A-l at A-l’s offices in New York and in Europe when visiting suppliers. He participated in A-l’s formation, ordered goods from suppliers in Europe at the direction of Kevin Cassidy and Santangelo after purchase orders from HSN were received, participated in organizing shipments of goods to HSN, submitted his personal expenses for payment by A-l, and co-signed A-l’s checks with Jack Cassidy and Kevin Cassi-dy. He also directed and controlled, in part, the disbursement of A-l’s money to ATP, to A-l’s shareholders, to Premier, and to third parties on behalf of shareholders to cover their personal expenses.
17. Santangelo performed his services for A-l primarily in Florida at HSN’s offices, although he also performed services for A-l and attended A-l meetings in New York. He participated in A-l’s formation, served as a liaison between A-l and HSN, submitted personal expenses to A-l for payment, and visited European suppliers on occasion. Santangelo did not sign A-l’s checks. His primary function was to assure prompt payment of A-l invoices by HSN and to assist in developing sales by A-l to HSN. He also directed and controlled, in part, the disbursement of A-l’s money to ATP, to A-l’s shareholders, to Premier, and to third parties on behalf of shareholders to cover their personal expenses.
18. On March 1, 1988, American Trade Credit Corporation (“ATCC”) and A-l entered into an accounts purchase agreement. That agreement provided that ATCC would fund the operations of A-l by purchasing invoices from A-l at a discount. Jack Cas-sidy, as president of A-l, and Restivo, as secretary of A-l, signed the agreement.
19. In May, 1988, ATCC assigned its receivables and all rights and obligations in and under its contracts with A-l to ATP.
20. As a result of this assignment, the obligations, duties, and liabilities of A-l, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo, whether created by the accounts purchase agreement, the security agreement, see ÍÍ 27, or the personal guarantees, see H 23-26, that had been owing to ATCC, now exist for the benefit and protection of ATP as though ATP had been the entity which entered into those agreements.
21. Under the accounts purchase agreement, a copy of which is attached as exhibit 1 and made a part hereof, A-l, and its authorized agents, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo, warranted, inter alia, that:
a. all invoices purchased by ATP would be paid on or before their respective due dates by the account debtor, and if not, by A-l;
b.- any property returned by an account debtor to A-l would be held in trust for ATP as security;
c. all invoices purchased by ATP would represent bona fide indebtedness to A-l arising from the actual sale and delivery of goods to the account debtor;
d. all invoices purchased by ATP would represent the actual sale and delivery of goods that were “finally accepted” by the account debtor;
e. all invoices purchased by ATP would reflect amounts “unconditionally owing” to A-l;
f. notification would be sent to account debtors to pay ATP or to deposit the proper amount in ATP's designated lockbox;
g. all payments received by A-l from account debtors on the purchased invoices would be held in kind and in trust for the benefit of ATP;
h. all payments received by A-l from account debtors on the purchased invoices would be delivered without negotiation to ATP;
i. A-l’s corporate books and records would be available to ATP for inspection and review; and
j. that all reasonable attorney’s fees and court costs which ATP incurred to enforce the provisions of the account purchase agreement would be paid in full upon ATP’s demand.
22.The accounts purchase agreement also provided that:
a. ATP’s remedies in the event of a breach would not be exclusive;
b. ATP's decision to exercise one remedy would not waive the right to exercise a different remedy on the same or another occasion;
c. all transactions under the agreement would be deemed to be consummated in Pennsylvania;
d. Pennsylvania law would apply if disputes arose between A-l and ATP; and
e. A-l waived its rights to a trial by jury in the event litigation arose between A-l and ATP.
23. On or about March 1, 1988, Jack Cassidy, Kevin Cassidy, and Restivo each signed a personal guarantee, a copy of which is attached as exhibit 2 and made a part hereof, that A-l would discharge its obligations to ATP and that to the extent A-l failed to do so, each of them would discharge its obligations.
24. Pursuant to the guarantees, Jack Cassidy, Kevin Cassidy, and Restivo were éach personally liable for any default under or breach of the accounts purchase agreement by A-l.
25. In addition, Jack Cassidy, Kevin Cassidy, and Restivo each guaranteed that he would not impede or interfere with the collection by ATP of unpaid purchased invoices and would report to ATP all disputes with account debtors.
26. By their guarantees, Jack Cassidy, Kevin Cassidy, and Restivo each guaranteed to ATP that no officer, employee, or agent of A-l had committed or would commit any fraud, deceit or criminal act in connection with the transactions under the accounts purchase agreement.
27. A-l and ATP also signed a security agreement, a copy of which is attached as exhibit 3 and made a part hereof, which granted to ATP a security interest in all of A-l’s accounts, general intangibles, chattel paper or other instruments, and contract rights.
28. On March 1, 1988, Jack Cassidy, Kevin Cassidy, and Restivo, as A-l’s directors, officers, and agents, signed a “Certificate of Resolutions and Incumbency,” a copy of which is attached as exhibit 4 and made a part hereof. That document memorialized a resolution of A-l’s board of directors that “any one or more of the officers or agents” of A-l were authorized to:
a. enter into and execute the accounts purchase agreement;
b. grant to ATP a security interest in A-l’s property as described in the security agreement;
c. sell invoices to ATP;
d. make remittances and payments to ATP by check or draft; and
e. “do and perform all other acts and things deemed by such officer or agent necessary or desirable to effectuate the intent of any of the” relevant contracts.
29. During the twenty-one month period between March 1, 1988, and January 1, 1990, pursuant to the accounts purchase agreement, ATCC and ATP purchased eighty-two invoices totalling $16,157,451.30 from A-l.
30. Between March, 1988, and February 1, 1989, HSN and A-l made timely payments to ATCC and ATP on purchased invoices.
31. On or about February 1, 1989, a signed copy of a “Summary of Financing Program” (“summary”) was sent from A-l to ATP. The summary described the year’s new pricing details, procedures for the financing program, and an explanation of the insurance policy for the purchased accounts receivables.
32. This summary was not a new agreement. It did not materially modify or rescind the accounts purchase agreement. It was not a novation or a substitution. It merely altered some of the pricing and financing details.
33. The accounts purchase agreement, the guarantees, and the security agreement remained in full force and effect.
34. By letter dated and mailed March 4, 1988, A-l, as required under the accounts purchase agreement, directed HSN to make payment on A-l invoices to ATP’s lockbox in New York.
35. ATP also requested that A-l stamp its invoices sent to HSN with instructions to make payment to ATP or to ATP’s lock-box.
36. A significant number of invoices sent out were not stamped with this instruction.
37. Moreover, in a letter dated and delivered by Federal Express on January 25, 1989, Jack Cassidy notified HSN to "continue” to make payments on all invoices directly to A-l. The letter further stated that “[u]nder no circumstances should remittances be made to any third party or to any other designation, without our written authority.”
38. On numerous occasions prior to the posting of the January 25, 1989, letter, and regularly thereafter, HSN made payments directly to A-l on invoices sold to ATP.
39. ATP was aware of this practice and protested to A-l. ATP again requested that the payment instructions be stamped on all invoices and an additional letter with this request be sent to HSN.
40. Jack Cassidy, as the authorized agent of A-l, Kevin Cassidy, Restivo, and Santangelo, represented to ATP’s vice president, Robert Taylor, by telephone, that the required instructions had been and would continue to be stamped on invoices and that HSN had been and would be notified again to send payments to ATP’s lockbox. This representation was false and Jack Cassidy knew it was false.
41. ATP, however, continued to purchase invoices from A-l, because A-l turned over to ATP the payments from HSN, at least until the summer of 1989.
42. Throughout the latter half of 1989, and January, 1990, a number of purchased invoices went unpaid by A-l after it had received payment from HSN. Those still outstanding are:
a. Invoice no. 1349 for $232,500.00, dated June 6, 1989, and funded by ATP through a wire transfer on June 12, 1989, to A-l’s Chase Manhattan Bank account. As of October 24, 1990, the following was due ATP: $232,500.00 plus interest of $54,-462.33, for a total debt of $286,962.33.
b. Invoice no. 1351 for $329,750.00, dated June 13, 1989, and funded by ATP through a wire transfer on June 19, 1989, to A-l’s Chase Manhattan Bank account. As of October 24, 1989, the following was due ATP: $329,750.00 plus interest of $76,-104.49, for a total debt of $405,854.49.
c. Invoice no. 1353 for $912,550.00, dated July 12, 1989, and funded by ATP through a wire transfer on July 17, 1989, to A-l’s Chase Manhattan Bank account. As of October 24, 1990, the following was due American Trade: $211,112.41 (the rest of the debt is reflected in unpaid invoices nos. 1415, 1417, and 1419) plus interest of $45,-704.39, for a total debt of $256,816.80.
d. Invoice no. 1358 for $19,973.25, dated August 1, 1989, and funded by ATP through a wire transfer on August 22, 1989, to A-l’s Chase Manhattan Bank account. As of October 24, 1990, the following was due American Trade: $19,973.25 plus interest of $4,127.08, for a total debt of $24,100.33.
e. Invoice no. 1359 for $104,000.00, dated August 2, 1989, and funded by ATP through a wire transfer on August 22, 1989, to A-l’s Chase Manhattan Bank account. As of October 24, 1990, the following was due American Trade: $104,000.00 plus interest of $21,438.25, for a total debt of $125,438.25.
f. Invoice no. 1399 for $33,387.00, dated August 4, 1989, and funded by ATP through a wire transfer on August 22, 1989, to A-l’s Chase Manhattan Bank account. As of October 24, 1990, the following was due American Trade: $33,387.00 plus interest of $6,832.90, for a total debt of $40,219.90.
g. Invoice no. 1415 for $205,575.00, dated December 15, 1989. This invoice was not funded, rather it was a replacement for part of the debt owed on invoice no. 1353. As of October 24, 1990, the following was due American Trade: $205,575.00 plus interest of $28,690.38, for a total debt of $234,265.38.
h. Invoice no. 1417 for $347,695.00, dated December 28, 1989, and funded by ATP through a wire transfer on August 22, 1989, to A-l’s Chase Manhattan Bank account. As of October 24, 1990, the following was due American Trade: $347,695.00 plus interest of $46,295.83, for a total debt of $393,990.83.
i. Invoice no. 1419 for $265,760.00, dated December 28, 1989, and funded by ATP through a wire transfer on August 22, 1989, to A-l’s Chase Manhattan Bank account. As of October 24, 1990, the following was due American Trade: $265,760.00 plus $35,386.13, for a total debt of $301,-146.13.
43. Certain of those invoices did not represent bona fide sales and deliveries of merchandise to HSN, did not represent the actual sale and delivery of merchandise that had been finally accepted by HSN, or did not accurately reflect amounts unconditionally owing from HSN to A-l and ATP. Specifically, those invoices are:
a. A-l invoice no. 1349 which when sold to ATP reflected an HSN order of 15,000 Vatican coin sets at a total cost of $232,-500. ATP funded this amount. HSN documents, however, reveal that only 1,500 sets were ordered by and shipped to it at a total cost of $23,250. HSN paid $23,250 to A-l, which deposited that amount in its bank account but did not remit to ATP. The invoice and purchase order were intentionally and knowingly altered by A-l, acting through its authorized agents, Jack Cassidy, Kevin Cassidy, Restivo, and San-tangelo, to reflect the greater amount before the invoice was offered for sale to ATP.
b. A-l invoice no. 1359 which when sold to ATP reflected an HSN order of 8,000 fire extinguishers at a total cost of $104,-000. ATP funded this amount on August 22, 1989. The purchase order number for these items was 21988. HSN records disclose that the fire extinguisher were shipped to it under invoice no. 1366, dated one month after invoice no. 1359. Invoice no. 1359 was never submitted to HSN. Invoice no. 1366 was not funded by ATP. No payment on either invoice has been made to ATP, although HSN paid A-l the full amount on invoice no. 1366, an amount slightly greater than that funded by ATP on invoice no. 1359. The money owing to ATP was deposited in one of A-l’s bank accounts.
c. A-l invoice no. 1417 dated December 28, 1989, which when sold to ATP reflected an HSN order of 42,000 miscellaneous items at a total cost of $347,695. ATP funded this amount. HSN has no record of invoice no. 1417, but the same goods were shipped to HSN under invoice no. 1430, dated February 15, 1990. HSN paid A-l directly for those goods and A-l, acting through Restivo and Santangelo, deposited that amount in its bank accounts. A-l, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo never paid ATP for either invoice no. 1417 or 1430.
44. On purchased invoices nos. 1349, 1351, 1353, 1358, 1359 (actually, no. 1366, see ¶ 43(b)), 1399, 1417 (actually, no. 1430, see 11 43(c)), and 1419, HSN refused to accept all the goods shipped because of defects and damages. Thus, ATP was sold invoices by A-l, acting through Jack Cassi-dy, Kevin Cassidy, Restivo, and Santange-lo, that did not represent the actual sale and delivery of goods “finally accepted” by HSN. This was a violation of the accounts purchase agreement and the guarantees.
45. On purchased invoices nos. 1349, 1351, 1353, 1358, 1399, 1417 (actually, no. 1430, see II 43(c)), and 1419, HSN did not pay the invoiced amount because of those defects, damages, and other price discrepancies. HSN remitted to A-l less than the invoiced amount. ATP, although it had funded the invoiced amount, was not made aware of HSN’s adjustments by A-l, Jack Cassidy, Kevin Cassidy, Restivo, and San-tangelo. This was a violation of the accounts purchase agreement and the guarantees.
46. On purchased invoices nos. 1349, 1351, 1353, 1358, 1399, 1417 (actually, no. 1430, see 1143(c)), and 1419, HSN did not pay the invoiced amount because of those defects, damages, and other price discrepancies. HSN remitted to A-l less than the invoiced amount. Thus, ATP was sold invoices by A-l, acting through Jack Cassi-dy, Kevin Cassidy, Restivo, and Santange-lo, that did not represent the amounts “unconditionally owing” to A-l. This was a violation of the accounts purchase agreement and the guarantees.
47. HSN paid A-l on the following invoices in the following amounts:
a. A-l invoice no. 1349 paid by HSN check in the amount of $23,250;
b. A-l invoice no. 1351 paid by HSN check in the amount of $326,168;
c. A-l invoice no. 1353 paid by HSN checks totalling $901,468.50;
d. A-l invoice no. 1358 paid by HSN check in the amount of $19,485;
e. A-l invoice no. 1359 paid as invoice no. 1366 by HSN check in the amount of $108,460;
f. A-l invoice no. 1399 paid by HSN check in the amount of $32,848.20;
g. A-l invoice no. 1415 paid by HSN check in the amount of $205,575;
h. A-l invoice no. 1417 paid as invoice nos. 1430 and 1430A by HSN checks total-ling $274,403.93; and
i. A-l invoice no. 1419 paid by HSN cheeks totalling $259,441.53.
48. As to each amount in ¶ 47, A-l was obligated by the accounts purchase agreement either to remit the money to ATP or to hold it in trust for the benefit of ATP. A-l, acting through Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo, did neither.
49. In early December, 1989, Robert Taylor, the assistant vice-president at ATP, was given the responsibility of collecting A-l’s overdue debt, which at the time was approximately $1,500,000.
50. Taylor and Jack Cassidy, on behalf of A-l, Kevin Cassidy, Restivo, and San-tangelo, discussed alternative methods to resolve the delinquency.
51. On December 6, 1989, Taylor and Jack Cassidy, as an agent for A-l, Kevin Cassidy, Restivo, and Santangelo, spoke by telephone. In that conversation, Jack Cas-sidy admitted that A-l had received payments directly from HSN and had not turned over those funds to ATP.
52. Jack Cassidy falsely stated that HSN was slow in paying on invoices because of shipping problems.
53. Jack Cassidy also requested that Taylor not contact HSN. I infer that Jack Cassidy did not want Taylor to contact HSN because he might have learned that HSN had consistently made payments directly to A-l and had previously paid on invoices that A-l, acting through Jack Cas-sidy, Kevin Cassidy, Restivo, and Santan-gelo, intended to re-issue and sell to ATP.
54. Jack Cassidy did not dispute the existence of the debt or its amount.
55. On December 6, 1989, Jack Cassidy, as an agent for A-l, Kevin Cassidy, Resti-vo, and Santangelo, sent a letter and eight post-dated checks to Taylor. The letter was transmitted by wire and by Federal Express with the eight checks enclosed.
56. During a telephone conversation on December 13, 1989, and memorialized by a letter of the same date, Taylor and Jack Cassidy, as an agent for A-l, Kevin Cassi-dy, Restivo, and Santangelo, agreed to work-out the delinquency by:
a. A-l’s assigning to ATP $800,000 in new A-l invoices, which ATP would not fund;
b. ATP’s accepting the eight post-dated checks for the balance of the debt; and
c. A-l’s notifying HSN to make all future payments on purchased invoices to ATP.
57. Jack Cassidy notified HSN by mail to send all payments for goods received to ATP.
58. On December 20, 1989, A-l invoice nos. 1415, 1417, and 1419, totalling $819,-030. were sent by mail to Taylor.
59. Taylor was instructed, by letter transmitted by wire and Federal Express on December 20, 1989, by Jack Cassidy, acting as an agent for A-l, Kevin Cassidy, Restivo, and Santangelo, to delay submitting the first check for $232,500. for a short time, while HSN verified its receipt of the goods and paid for them. That amount corresponded to the amount funded by ATP on invoice no. 1349, which was still owed to ATP by A-l. See ¶¶ 42(a) and 43(a).
60. Jack Cassidy knew, but Taylor and ATP did not know, that HSN had paid A-l for those goods in July, 1989, and the funds had been deposited into A-l’s Chase Manhattan Bank account.
61. Jack Cassidy also knew, but Taylor and ATP did not know, that HSN had only paid $23,250 on invoice no. 1349 because 1,500, not 15,000, Vatican coin sets had been ordered by and shipped to HSN. See 1143(a).
62. A week later, after receiving Jack Cassidy’s approval, ATP deposited the first post-dated check for $232,500 into its account. The check was returned for insufficient funds by A-l’s bank.
63. ATP, again upon Jack Cassidy’s approval, deposited the second post-dated check for $329,750 into its account. That amount corresponded to the amount funded by ATP on invoice no. 1351, which was still owed to ATP by A-l. See 1142(b). The check never cleared because payment had been stopped by Restivo, acting as A-l’s agent and with Santangelo’s approval, on January 5, 1990. The check was returned by A-l's bank.
64. During a phone call in mid-January, 1990, Taylor learned from HSN that it had paid A-l on invoice nos. 1349 and 1351 in June and July, 1989.
65. The other checks were never deposited by ATP.
66. No funds existed in A-l’s Chase Manhattan bank account to cover those checks had they been submitted. The account had been closed by Restivo and San-tangelo on January 15, 1990. Any funds that had been in that account were transferred to a new account opened at the same bank by Restivo and Santangelo.
67. On January 11, 1990, Jack Cassidy and Kevin Cassidy ceased to be associated with A-l. The reason for their departure is not germane to this proceeding at this juncture. Their split with the other defendants, however, has generated litigation in the New York state courts.
68. Restivo and Santangelo, as shareholders of A-l, commenced a damage action against Jack and Kevin Cassidy. Res-tivo and Santangelo charge that the Cassi-dys caused A-l to be in default to its “factor” for $1,512,412.29, the exact amount owed to ATP at that time. Restivo and Santangelo also alleged that the Cassi-dys diverted A-l assets and sent to the “factor” bills and invoices for items not shipped to account debtors. The action is still pending.
69. Restivo and Santangelo also filed a petition to dissolve A-l. By order of the New York court and with the consent of the four shareholders, A-l has been dissolved and a receiver, Joseph A. Lichten-thal, Esquire, of White Plains, New York, has been appointed to collect and preserve A-l’s remaining assets.
70. The receiver has chosen not to retain counsel for A-l in this action. A-l has not responded to the amended complaint. A-l does not oppose the entry of a preliminary injunction against it.
71. On January 13, 1990, Restivo, on behalf of Santangelo and A-l, telephoned Taylor and told him that Jack and Kevin Cassidy had resigned and all files pertaining to ATP were missing from A-l’s offices. Restivo informed Taylor that A-l was still operating and that ATP would be paid.
72. On January 19, 1990, Taylor met with Restivo, Sheldon Eisenberger, Esquire (counsel for A-l at the time, now counsel for Restivo and Premier), and Carmine Cor-nette, Santangelo’s designated representative, in A-l’s offices in New York. Those men told Taylor that they were attempting to locate the missing files and to verify the debt. They promised to keep ATP informed of their progress.
73. On that same day, Premier was incorporated. Its initial officers and directors were Restivo and Santangelo. Its shareholders are Santangelo and Restivo’s wife.
74. In February, 1990, Taylor, Restivo, Santangelo, and Eisenberger met again. This time the meeting was held in Eisen-berger’s office in New York. Restivo, San-tangelo, and Eisenberger suggested that the outstanding debt might be reduced if ATP worked with a new company.
75. Taylor did not object to this arrangement, or at least, he did not state any objection.
76. Restivo, Santangelo, and Eisenber-ger did not inform Taylor that, in fact, Premier had been incorporated on January 19, 1990.
77. From mid-January, 1990, to May, 1990, Restivo, Santangelo, and A-l deposited over $400,000 into A-l’s accounts. That amount is approximately the same as the amounts received from HSN as payments on invoice nos. 1419, 1430, and 1430A. That amount was distributed to Restivo, Santangelo, Premier, creditors other than ATP, and third parties to pay for the personal expenses of Restivo and Santangelo.
78. In 1989, Jack Cassidy received A-l shareholder distributions totalling $510,-000, $90,000 of which he received after and during A-l’s delinquency to ATP. He also received $25,755.06 in salary from A-l between November, 1989, and January, 1990.
79. In 1989, Kevin Cassidy received A-l shareholder distributions totalling $558,-396, $135,000 of which he received after and during A-l’s delinquency to ATP. He also received $28,419.34 in salary from A-l between November, 1989, and January, 1990.
80. In 1989, Restivo received A-l shareholder distributions totalling $525,000, $105,000 of which he received after and during A-l’s delinquency to ATP. He also received $29,934.16 in payroll payments between November 1, 1989, and February 23, 1990.
81. In 1989, Santangelo received A-l shareholder distributions totalling $545,-000, $155,000 of which he received after and during A-l’s delinquency to ATP. He also received $30,000 in salary from A-l in November and December, 1989.
82. In 1989 and 1990, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo received over $2,000,000 from A-l. The following chart summarizes the approximate amount of money received by each defendant as shareholder distributions, shareholder distributions received by defendants during the period of A-l’s delinquency, and payroll payments between November, 1989, and February 23, 1990:
'89-90 sh. dist deling, sh. dist. Pay
J. Cassidy: $ 510,000 $ 90,000 25,755.06
K. Cassidy: 558,396 135,000 28,419.34
Restivo: 525,000 105,000 29,934.16
Santangelo: 545,000 155,000 30,000.00
Total: 1,665,896 485,000 114,108.56
83.Additionally, during 1989 and 1990, while A-l was in debt to ATP, A-l, at the request of and with the authorization and approval of Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo, made the following payments, inter alia, to:
a. Thomas Cahill and Garrity & Levin, attorneys who represented Kevin Cassidy in personal matters, by checks dated May 8, 1989, for $13,115 and $4,097.50, respectively;
b. Yellow Freight System, Inc. and Til-den Commercial Alliance, Inc., by checks dated July 25, 1989, for $1,391.62 and $947.19, respectively;
c. Richard M. Speer, by check dated July 25, 1989, for $40,000, as partial payment for Kevin Cassidy’s yacht;
d. Sheldon Eisenberger, by checks issued in January and February, 1990, total-ling $43,000.;
e. various creditors and third parties for payment of the shareholders’ personal expenses, including payments on a Rolls Royce, a Jaguar, and a Mercedes Benz, for car repairs, for chauffeured limousines, for travel in Florida and abroad, and on credit card bills;
f. bank accounts in Switzerland, purportedly held by Logan Financial, an A-l creditor, by wire transfer on January 17, 1990;
g. the designation "cash” by a check dated October 10, 1989, for $1,000 with the words “trip to Ireland, Galway Crystal” on the corresponding check stub;
h. the designation “cash” by a check dated September 27, 1989, for $3,000, with the description “T & E” (I infer those initials to stand for “Travel & Entertainment”) on the corresponding check stub;
i. Term Enterprises, Inc. by check dated August 21, 1989, for $10,000 to repay a loan made to Kevin Cassidy;
j. Capitol Check Cashing by check dated December 5, 1989, for $25,000 as a loan. Capitol Check Cashing was owned by A-l and its shareholders; and
k. Dora Dobbs, Inc. by check dated August 21, 1989, for $25,000 as a loan. A-l, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo were the shareholders of Dora Dobbs. Dora Dobbs was located in A-l’s offices in New York.
84. As of October 24, 1990, the outstanding delinquency to ATP stood at $2,055,198.57, including interest.
85. ATP has lost its source of financing and is no longer operating.
86. Under the terms of the accounts purchase agreement, A-l, and its authorized agents, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo, were obligated to hold in trust for the benefit of ATP payments received from HSN.
87. The accounts purchase agreement created a trust for the benefit of ATP over all payments received by A-l from HSN. Under the accounts purchase agreement, these payments were to be forwarded to ATP or its lockbox. Instead, the funds were disbursed by and to Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo.
88. Under the terms of the guarantees, which provide that all payments received by A-l would be forwarded to ATP in accordance with the accounts purchase agreement and that A-l and the guarantors would not divert such payments in contravention of the accounts purchase agreement, Jack Cassidy, Kevin Cassidy, and Restivo, were obligated to hold in trust for the benefit of ATP payments received from HSN.
89. The guarantees created a trust for the benefit of ATP over the payments received by A-l from HSN. Instead of being held in trust and forwarded to ATP in accordance with the accounts purchase agreement, these funds were disbursed by and to Jack Cassidy, Kevin Cassidy, and Restivo.
90. Under the terms of the security agreement, A-l, and its authorized agents, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo, were obligated to hold in trust for the benefit of ATP payments received from or goods returned by HSN and all other security pledged by A-l.
91. The security agreement created a trust over the payments received by A-l from HSN and disbursed by and to Jack Cassidy, Kevin Cassidy, Restivo, and San-tangelo.
92. Jack Cassidy, Kevin Cassidy, Resti-vo, Santangelo, and Premier have each unjustly received from A-l monies that each was obligated to hold in trust for the benefit of ATP.
93. A-l, Jack Cassidy, Kevin Cassidy, Restivo, Santangelo, and Premier have caused and benefitted by payments to third parties of monies that each should have held in trust for the benefit of ATP.
94. None of the defendants have held in trust for the benefit of ATP the assets each received from A-l.
95. None of the defendants have remitted assets they were obligated to hold in trust for the benefit of ATP to ATP.
96. A-l diverted and transferred its assets to its shareholders, to third parties, and to Premier.
97. Jack Cassidy, Kevin Cassidy, Resti-vo, and Santangelo caused A-l’s assets to be diverted and transferred to the shareholders, to third parties, and to Premier.
98. A-l became insolvent at the end of 1989.
99. A-l is insolvent and unable to pay creditors.
100. A-l was incurring debt and was unable to pay its creditors, including ATP, at a time when A-l, Jack Cassidy, Kevin Cassidy, Restive, and Santangelo were distributing A-l’s assets to themselves, to third parties, and to Premier.
101. A-l was left with unreasonably small capital as a result of the distribution of its assets by A-l, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo to themselves, to third parties, and to Premier.
102. A-l, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo have failed and refused to permit ATP to inspect and review A-l’s corporate books and records.
103. A-l, Jack Cassidy, Kevin Cassidy, Restivo, Santangelo, and Premier knew of and agreed to participate in the acts and activities that are described in these findings of fact and conclusions of law.
104. Between March 1, 1988, and mid-January, 1990, A-l, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo acted as agents for each other. Each defendant was authorized to transact affairs for and on behalf of each other defendant.
105. From mid-January, 1990, through the present, A-l, Restivo, Santangelo, and Premier acted as agents for each other. Each defendant was and is authorized to transact affairs for and on behalf of each other defendant.
106. ATP rightfully believed that A-l, Jack Cassidy, Kevin Cassidy, Restivo, San-tangelo, and Premier were authorized to transact affairs for and on behalf of each other defendant.
107. From March 1, 1988, through the present, A-l, Jack Cassidy, Kevin Cassidy, Restivo, Santangelo, and Premier conspired together with the common purpose to defraud ATP out of its assets for their own personal gain.
CONCLUSIONS OF LAW
1. Subject matter jurisdiction is vested in this court pursuant to 28 U.S.C. §§ 1331 and 1332, and 18 U.S.C. § 1961. Venue is properly laid in this court under 28 U.S.C. § 1391 and 18 U.S.C. § 1965.
2. ATP established that: (1) A-l, acting through Jack Cassidy, Kevin Cassidy, Res-tivo, and Santangelo, breached the accounts purchase agreement; (2) Jack Cassi-dy, Kevin Cassidy, and Restivo breached their guarantees; (3) A-l, acting through Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo, breached the security agreement; (4) A-l, Jack Cassidy, Kevin Cassi-dy, Restivo, and Santangelo violated a trust created by the terms of the accounts purchase agreement; (5) Jack Cassidy, Kevin Cassidy, and Restivo violated a trust created by the terms of their guarantees; (6) A-l, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo violated a trust created by the terms of the security agreements; (7) the imposition of a constructive trust over the funds received by A-l from HSN and distributed to A-l, Premier, Jack Cassidy, Restivo, and Santangelo is warranted and necessary to protect ATP; (8) Jack Cassi-dy, Kevin Cassidy, Restivo, and Santange-lo, in their individual capacity, each tor-tiously interfered with the contracts between ATP and A-l; (9) A-l, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo, in their individual capacity, each tortiously interfered with the contractual obligations owed by HSN to ATP; (10) A-l, Premier, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo committed fraud on ATP; (11) Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo caused A-l to contravene New York’s fraudulent conveyance statutes; and (12) A-l, Premier, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo violated RICO’S civil provisions, 18 U.S.C. §§ 1962(a), (b), (c), and (d).
3. Specifically, A-l, acting through Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo, breached the accounts purchase agreement by knowingly and intentionally:
a. selling invoices to ATP that have not been paid in full by HSN or, alternatively, by A-l;
b. selling invoices, such as invoice nos. 1349, 1351, 1359, and 1417, to ATP that did not represent bona fide sales of merchandise to HSN;
c. altering invoice no. 1349 to reflect a greater shipment of merchandise to HSN than had actually been shipped to it;
d. selling invoices to ATP representing goods that had not been “finally accepted” by HSN;
e. making false representations to ATP that invoice nos. 1349 and 1351 had not been paid by HSN when, in fact, HSN had paid for the goods sold under those invoices months before;
f. selling invoices to ATP for which A-l had already been paid by HSN;
g. selling invoices to ATP that did not reflect amounts “unconditionally owing” to A-l from HSN;
h. failing to notify ATP of disputes over merchandise between A-l and HSN;
i. notifying HSN to pay A-l instead of ATP or ATP’s lockbox;
j. failing to hold payments received from HSN in trust for the benefit of ATP;
k. failing to remit to ATP assets received from HSN in trust for the benefit of ATP;
l. refusing to permit ATP to inspect A-l’s corporate books and records; and
m. failing to repurchase invoices purchased by ATP that were not paid in full on or before their respective due dates by paying the amount owed immediately to ATP.
4. Jack Cassidy, Kevin Cassidy, and Restivo breached their guarantees by knowingly and intentionally:
a. causing and permitting A-l’s breach of the accounts purchase agreement as described in ¶ 3 of these conclusions of law.
b. failing to rectify A-l’s breach of the accounts purchase agreement as described in ¶ 3 of these conclusions of law.
c. ensuring that HSN would pay A-l rather than ATP or ATP’s lockbox;
d. failing to cause A-l to hold payments received from HSN in trust for the benefit of ATP;
e. failing to cause A-l to remit to ATP payments received from HSN;
f. receiving money from A-l that A-l was legally obligated to hold in trust for the benefit of ATP;
g. failing to hold in trust for the benefit of ATP money received from A-l;
h. failing to remit to ATP payments received from A-l;
i. permitting the officers, employees, and agents of A-l to commit fraud, deceit, or criminal acts in connection with the transactions under the accounts purchase agreement;
j. committing fraud, deceit, or criminal acts in connection with the transactions under the accounts purchase agreement; and
k. failing to satisfy A-l’s debt to ATP.
5. A-l, acting through Jack Cassi-dy, Kevin Cassidy, Restivo, and Santange-lo, breached the security agreement by failing to hold all acquired accounts, all general intangibles, all contract rights, all chattel paper, and all other instruments in trust for the benefit of ATP.
6. A-l violated a trust, created by the terms of the accounts purchase agreement, by knowingly and intentionally:
a. failing to hold payments received from HSN in trust for the benefit of ATP;
b. failing to remit payments received from HSN in trust for the benefit of ATP:
7. Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo violated a trust, created by the terms of the accounts purchase agreement, by knowingly and intentionally:
a. failing to cause A-l to hold payments received from HSN in trust for the benefit of ATP;
b. failing to cause A-l to remit to ATP payments received from HSN which A-l was obligated to hold in trust for the benefit of ATP:
c. receiving money from A-l that A-l was legally obligated to hold in trust for the benefit of ATP;
d. failing to hold money received from A-l in trust for the benefit of ATP; and
e. failing to remit money received from A-l to ATP.
8. Jack Cassidy, Kevin Cassidy, and Restivo violated a trust, created by the terms of their guarantees, by knowingly and intentionally:
a. failing to cause A-l to hold payments received from HSN in trust for the benefit of ATP;
b. failing to cause A-l to remit to ATP payments received from HSN which A-l was obligated to hold in trust for the benefit of ATP:
c. receiving money from A-l that A-l was legally obligated to hold in trust for the benefit of ATP;
d. failing to hold money received from A-l in trust for the benefit of ATP; and
e. failing to remit money received from A-l to ATP.
9. A-l, Jack Cassidy, Kevin Cassi-dy, Restivo, and Santangelo violated a trust, created by the terms of the security agreement, by failing to hold in trust for the benefit of ATP assets granted to ATP as security.
10. ATP did not waive any rights under or benefits of the accounts purchase agreement, the security agreement, or the guarantees.
11. The summary of financing was not a new agreement. It did not materially modify or rescind the accounts purchase agreement, the security agreement, or the guarantees. It was not a novation or a substitution.
12. The accounts purchase agreement, the security agreement, and the guarantees remained in full force and effect throughout the transactions described in these findings of fact and conclusions of law. The accounts purchase agreement, the security agreement, and the guarantees are enforceable.
13.The imposition of a constructive trust over the assets that should have been held in trust for the benefit of ATP but were unjustly received as shareholder distributions and payroll payments by Jack Cassidy, Kevin Cassidy, Restivo, and San-tangelo is warranted and necessary for the protection of ATP.
14. A-l, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo knowingly and intentionally converted assets that should have been held in trust for the benefit of ATP for their own use.
15. A-l, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo knowingly and intentionally dissipated assets that should have been held in trust for the benefit of ATP through payments to Premier.
16. A-l, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo knowingly and intentionally dissipated assets that should have been held in trust for the benefit of ATP through payments to third parties to cover their personal expenses.
17. A-l, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo knowingly and intentionally disbursed assets that should have been held in trust for the benefit of ATP to third parties outside the jurisdiction of this court.
18. A-l, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo knowingly and intentionally converted, dissipated, and disbursed assets that should have been held in trust for the benefit of ATP to frustrate and defeat ATP’s collection efforts.
19. A-l, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo knowingly and intentionally converted, dissipated, and disbursed assets that should have been held in trust for the benefit of ATP to defraud ATP.
20. ATP has shown that it is probable that A-l, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo, if permitted, will continue to convert, dissipate, and disburse those assets that should have been held in trust for the benefit of ATP.
21. Jack Cassidy, Kevin Cassidy, Resti-vo, and Santangelo, in their individual capacities, intentionally and improperly interfered with contracts between ATP and A-l by causing A-l to be unable to perform its contractual obligations.
22. A-l and Jack Cassidy, Kevin Cassi-dy, Restivo, and Santangelo, in their individual capacities, intentionally and improperly interfered with ATP’s contractual right to payment from HSN by causing HSN to make payments to A-l and by causing A-l to be unable to perform its contractual obligation to remit those payments to ATP.
23. A-l, acting through Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo, and Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo committed fraud by:
a. knowingly selling altered or false invoices to ATP;
b. knowingly selling invoices to ATP for which A-l had been previously paid by HSN;
c. falsely promising ATP that A-l’s debt would be paid in full when, in fact, they did not intend to pay on the debt;
d. providing post-dated checks to ATP knowing that there would not be sufficient funds in the accounts to cover them;
e. knowingly converting assets that should have been held in trust for the benefit of ATP; and
f. falsely representing to ATP that the terms of the accounts purchase agreement, the security agreement, and the guarantees would be followed.
24. In view of the knowing and intentional conversion, dissipation, and dispersal of assets that A-l, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo were legally obligated to hold in trust for the benefit of ATP and their acts of fraud, the imposition of a constructive trust over all of the assets of A-l, Jack Cassidy, Kevin Cassidy, Restivo, Santangelo, and Premier is warranted and necessary for the protection of ATP.
25.Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo caused A-l to violate New York Debtor & Creditor Law § 273 by conveying its assets to its shareholders, to third parties and to Premier without fair consideration. These actions rendered A-l insolvent and continued to occur while it was insolvent.
26. Jack Cassidy, Kevin Cassidy, Resti-vo, and Santangelo caused A-l to violate New York Debtor & Creditor Law § 274 by conveying its assets to its shareholders, to third parties, and to Premier without fair consideration. These actions left A-l with unreasonably small capital.
27. Jack Cassidy, Kevin Cassidy, Resti-vo, and Santangelo intentionally caused A-l to violate New York Debtor & Creditor Law § 275 by conveying its assets to its shareholders, to third parties, and to Premier. Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo knew A-l had incurred and would incur debt to ATP and other creditors beyond A-l’s ability to pay those debts as they matured.
28. Jack Cassidy, Kevin Cassidy, Resti-vo, and Santangelo knowingly caused A-l to violate New York Debtor & Creditor Law § 276 by conveying its assets to its shareholders, to third parties, and to Premier. Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo acted with the intent to hinder, delay, and defraud ATP.
29. ATP is entitled to injunctive relief under New York Debtor & Creditor Law § 278, to the extent necessary to satisfy its claims, by setting aside or annulling all conveyances of A-l’s assets without fair consideration to Jack Cassidy, Kevin Cassi-dy, Restivo, Santangelo, third parties, and Premier, or by disregarding the conveyances without fair consideration and attaching or levying execution upon the assets of Jack Cassidy, Kevin Cassidy, Restivo, San-tangelo, third parties, and Premier.
30. In view of the conveyance of A-l’s assets without fair consideration by A-l, acting through Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo, the imposition of a constructive trust over all the assets of A-l, Premier, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo is warranted and necessary for the protection of ATP.
31. ATP established its claims under 18 U.S.C. §§ 1962(a), (b), (c), and (d) asserted against A-l, Premier, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo.
32. The association-in-fact of A-l, Premier, Jack Cassidy, Kevin Cassidy, Res-tivo, and Santangelo constitutes an enterprise under 18 U.S.C. § 1961(4).
33. The enterprise was engaged in and its activities as described in these findings of fact and conclusions of law affected interstate and foreign commerce.
34. A-l, Premier, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo, with a common purpose to defraud ATP, agreed to and conspired to commit acts in violation of 18 U.S.C. § 1962(d).
35. A-l, Premier, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo engaged in a pattern of racketeering activity in violation of 18 U.S.C. § 1962(c).
36. A-l, Premier, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo performed acts in furtherance of and comprising the pattern of racketeering activity.
37. ATP has shown with a reasonable probability of success that A-l, Premier, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo committed acts of mail fraud in violation of 18 U.S.C. §§ 1341 and 2.
38. ATP has shown with a reasonable probability of success that A-l, Premier, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo committed acts of wire fraud in violation of 18 U.S.C. §§ 1343 and 2.
39. ATP has shown with a reasonable probability of success that A-l, Premier, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo committed acts of interstate transportation of securities obtained by fraud in violation of 18 U.S.C. §§ 2314 and 2.
40. ATP has shown with a reasonable probability of success that, if permitted, the acts in furtherance of and comprising the pattern of racketeering activity would continue in the future.
41. A-l, Premier, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo received income derived from the pattern of racketeering activity and used or invested that income in the operations of the enterprise and its affairs in violation of 18 U.S.C. § 1962(a).
42. A-l, Premier, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo acquired or maintained an interest in or control of the enterprise from the pattern of racketeering activity in violation of 18 U.S.C. § 1962(b).
43. ATP has shown that it has been injured by a violation of 18 U.S.C. § 1962, by the predicate acts which formed the pattern of racketeering activity and by the pattern of racketeering activity.
44. ATP will suffer irreparable injury if A-l, Premier, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo are permitted to convert, dissipate, and disburse assets that defendants were legally obligated to hold in trust for the benefit of ATP.
45. An unsatisfied money judgment against A-l, Premier, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo is probable unless ATP is granted its motion for a preliminary injunction.
46. ATP does not have an adequate remedy at law to ensure the payment of the debt owing to it by A-l, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo.
47. ATP does not have any other means of obtaining or securing the availability of the monetary relief it seeks from A-l, Premier, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo other than through the in-junctive relief described in the accompanying order.
48. A preliminary injunction is necessary to prevent the further conversion, dissipation, and disbursement of assets belonging to ATP by A-l, Premier, Jack Cas-sidy, Kevin Cassidy, Restivo, and Santan-gelo.
49. The balance of hardships weighs in favor of granting the requested injunctive relief.
50. The public interest is best served by preventing A-l, Premier, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo from the further conversion, dissipation, and disbursement of assets that should have been held in trust for the benefit of ATP.
51. ATP is entitled to the injunctive relief described in the accompanying order.
52. ATP is entitled to injunctive relief freezing the assets of A-l, Premier, Jack Cassidy, Kevin Cassidy, Restivo, and San-tangelo in such amounts as may be necessary to satisfy a judgment of $2,055,198.57 plus interest at the rate of 18% per annum from October 24, 1990, to the present, costs, attorney’s fees, and other charges pursuant to the accounts purchase agreement, the security agreement, and the guarantees.
53. This relief is reasonably related to the likely value of the expected judgment, absent treble damages available under RICO, against A-l, Premier, Jack Cassidy, Kevin Cassidy, Restivo, and Santangelo. The sum is calculated to approximate the amount of the debt owed to ATP plus interest, costs, attorney’s fees, and other charges required under the accounts purchase agreement, the security agreement, and the guarantees.
54. It is necessary for ATP to post security for the entry of the injunctive relief described in the accompanying order.
An order follows.
ORDER
AND NOW, this 11th day of February, 1991, it is hereby ordered that:
1. Plaintiff’s motion for a preliminary injunction is granted;
2. A hearing is scheduled for February 26, 1991, at 2:00 p.m., in courtroom 6A.
3. At the hearing, the parties shall submit a joint plan for the implementation and coordination of injunctive relief. That plan shall include provisions for:
a. the establishment and maintenance of an escrow account for plaintiff’s benefit in a federally insured commercial bank of plaintiff’s choosing located in this district;
b. the periodic reporting of transactions in the escrow account to the court;
c. directing account debtors of Premier and A-l to make payments to the escrow account;
d. the payment of money into the escrow account by account debtors, plaintiff (if it receives money from an account debt- or), or defendants;
e. the release of money to plaintiff, defendants, or third parties;
f. the periodic reporting of plaintiffs costs, attorney’s fees, and interest accrued on the outstanding delinquency;
g. the amount of money needed by defendants to operate in the ordinary course of business;
h. any extraordinary expenditures by defendants;
i. the transfer or conveyance of assets in the ordinary course of business by defendants to third parties;
j. the prompt payment to the escrow account by defendants of any assets received on all purchased and non-purchased accounts; and
k. the application for additional or modified injunctive relief.
4. The joint proposed plan may include provisions for the appointment of a special master to administer the transactions under this injunction.
5. Effective immediately, A-l, Jack Cassidy, Kevin Cassidy, Restivo, Santange-lo, and Premier shall direct all of Premier’s or A-l’s account debtors to make payments to no entity or person other than plaintiff or the escrow account.
6. Effective immediately, A-l, Jack Cassidy, Kevin Cassidy, Restivo, Santange-lo, and Premier shall direct debtors of Jack Cassidy, Kevin Cassidy, Restivo, and San-tangelo to make payments of principal, interest, dividends, fees, costs, penalties, awards, prizes, and distributions in kind to plaintiff or the escrow account.
7. Effective immediately, A-l, Jack Cassidy, Kevin Cassidy, Restivo, and San-tangelo shall comply with the terms and obligations of the accounts purchase agreement.
8. Effective immediately, A-l, Jack Cassidy, Kevin Cassidy, Restivo, and San-tangelo shall comply with the terms and obligations of the security agreement.
9. Effective immediately, Jack Cassidy, Kevin Cassidy, and Restivo shall comply with the terms and obligations of their guarantees.
10. Effective immediately, Jack Cassi-dy, Kevin Cassidy, Restivo, and Santangelo shall not interfere with any contract between plaintiff and A-l.
11. Effective immediately, A-l, Jack Cassidy, Kevin Cassidy, Restivo, and San-tangelo shall not interfere with any contract between plaintiff and a third party.
12. Effective immediately, A-l, Jack Cassidy, Kevin Cassidy, Restivo, Santange-lo, and Premier are prohibited from transferring, disposing, encumbering, using, selling or converting their assets, until further order of this court.
13. Paragraph 12 of this order shall not apply to any defendant who deposits $2,055,198.57 plus interest at the rate of 18% per annum from October 25, 1990, to the present, costs, attorney’s fees, and other charges required under the relevant contracts in a segregated escrow account, wherein withdrawals may be made only with this court’s approval, at a federally insured commercial bank in the name of plaintiff. Immediately upon deposit, that defendant shall provide to plaintiff and to the court the identification and location of the account.
14. A-l, Jack Cassidy, Kevin Cassidy, Restivo, Santangelo, and Premier shall have four days from the date of this order to identify for the court and for plaintiff’s counsel any and all bank accounts, money market accounts, stock trading accounts, personal or real property in which they have any interest, in whole or in part, in a personal or representative capacity wherever located in this country or abroad. The information shall cover the period between March, 1988, and the date of this order.
15. A-l, Jack Cassidy, Kevin Cassidy, Restivo, Santangelo, and Premier shall have ten days from the date of this order to produce at the offices of plaintiff’s counsel for inspection and photocopying by plaintiff or its counsel, all books, records, and financial documents relating to the above described accounts or property. The information shall cover the period between March, 1988, and the date of this order.
16. A-l, Jack Cassidy, Kevin Cassidy, Restivo, Santangelo, and Premier each shall have ten days from the date of this order to submit individual balance sheets prepared by a certified public accountant.
17. A-l, Jack Cassidy, Kevin Cassidy, Restivo, Santangelo, and Premier shall have ten days from the date of this order to produce at the offices of plaintiffs counsel for inspection and photocopying by plaintiff or its counsel, A-l’s books and records, financial records and documents, and current balance sheet, a description of all assets owned by A-l and their approximate value, a list of A-l’s account debtors, all documents relating to A-l’s account debtors, including but not limited to accounts receivable statements, invoices, letters, or contracts, and a list of outstanding account balances or debts owing to A-l by third parties. The information shall cover the period between March, 1988, and the date of this order.
18. Upon receipt of any payment from an account debtor or a third party on behalf of one of the defendants before the escrow account is opened, plaintiff shall immediately inform the court and place that money in a segregated account at a federally insured commercial bank.
19. After the escrow account is opened, plaintiff shall immediately transfer to the escrow account any money it has received from an account debtor or a third party on
behalf of one of the d