With a throwaway line that plaintiff also brought claims against “the attorneys”, Homapour v Harounian  2016 NY Slip Op 31408(U)  July 21, 2016  Supreme Court, New York County Docket Number: 653795/2015  Judge: Eileen Bransten goes on to discuss when a receiver should be appointed in a litigation.

“This is an action brought by Mehrnaz Nancy Homapour against her brother, Defendant Mark Harounian, and sixteen family-held limited liability companies (“Family LLCs”) 1 , of which Homapour and Harounian are each members. Homapour alleges that Mark Harounian mismanaged the Family LLCs to further his own interest. As a result, at the commencement of this litigation, Homapour filed the instant motion for the appointment of a receiver. Defendant Harounian opposes. For the reasons that follow, Homapour’ s motion is denied. ”

“After commencing the instant action, asserting a sole claim for a formal accounting, Defendants purportedly allowed Homapour access to records for the years 2013, 2014, and 2015 for the purpose of conducting an audit. Id. iii! 71-72. Through this audit, Plaintiff purportedly learned that Harounian was giving himself distributions from the LLCs’ accounts in the guise of commissions and personal expenditures. Id. iii! 83- l 01. Harounian also allegedly performed a cash-out refinancing of one of the LL Cs – United Fifth, LLC – and wrote himself a check for the proceeds without providing a distribution to any of the other members of United Fifth, LLC, including Plaintiff. Id. iii! 80-82. Homapour then amended her complaint to add Harounian and certain LLCs created by Harounian as defendants, as well as her father, sister, and sister-in-law. In addition, Homapour brings claims against the Family LLCs’ attorney and accountant. In addition to expanding the number of defendants, Homapour likewise added to the number of claims, which now number thirteen. Seven claims are asserted against Harounian: breach of fiduciary duty; waste; conversion; unjust enrichment; fraud/fraudulent inducement; constructive trust; and, accounting. Claims for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, and injunction are brought against the lawyer, while Plaintiff asserts aiding and abetting breach of fiduciary duty and professional negligence against the accountant. ”

“CPLR § 6401(a) provides for the appointment of a temporary receiver where “[ u ]pon motion of a person having an apparent interest in property which is the subject of an action . . . where there is danger that the property will be removed from the state, or lost, materially injured or destroyed.” “It is well recognized that courts of equity exercise extreme caution in appointing receivers pendente lite because such appointment results in the taking and withholding of possession of property from a party without an adjudication on the merits.” Hahn v. Garay, 54 A.D.2d 629, 630-31 (1st Dep’t 1976). Therefore, appointment of a temporary receiver requires a showing by clear and convincing evidence of the danger of irreparable loss or damage. See McBrien v. Murphy, 156 A.D.2d 140, 140 (1st Dep’t 1989). No such showing is made here. While Plaintiff highlights certain distributions to and expenditures made by Harounian, her displeasure with Harounian’s compensation and her belief that “he admittedly will not stop” do not demonstrate by clear and convincing evidence that the assets of the Family LLCs are in danger of waste, dissipation or disappearance. In re Armienti, 309 A.D.2d 659, 661 (1st Dep’t 2003). Instead, her allegations, if proven, may support her claims in the litigation3 but do not mandate the immediate wresting of the corporation from Harounian’ s control for the pendency of the litigation. Notably, Plaintiff does not challenge Harounian’s assertion that the Family LLCs are profitable, going concerns; instead, Homapour asserts that the profitability of the LLCs is no bar to the imposition of a temporary receiver. However, in this instance, the unchallenged solvency of the corporations and the fact that the compensation at issue has been in effect for several years strongly detracts from Plaintiff’s argument that Harounian’s alleged financial diversions “pose[] an immediate danger to the Companies’ well-being.” (Reply Br. at 12); see Martin v. Donghia Associates, Inc., 73 A.D.2d 898, 898 (1st Dep ‘t 1980) (determining that “it is unnecessary at this time to appoint a receiver for this profitable, on-going business”); see also B.D. & F. Realty Corp. v. Lerner, 232 A.D.2d 346, 346 (1st Dep’t 1996) (affirming denial of receiver application where “the value of the realty itself provides security and the property still generates income”). “