New York courts have long characterized a preliminary injunction as a "drastic remedy," and are sparing about the instances in which it may be granted.1 A party seeking a preliminary injunction must establish, by clear and convincing evidence, (1) a likelihood of success on the merits; (2) irreparable harm absent a preliminary injunction; and (3) a balance of equities tipping in the moving party's favor.2 Economic loss, compensable by money damages, does not constitute irreparable harm.3
Longstanding appellate precedent holds that the threat of destruction of a business if a preliminary injunction is not granted can constitute irreparable harm not compensable by money damages. While a number of recent Commercial Division cases follow this precedent, some have drawn factual distinctions in denying relief, leading to holdings that an award of the value of the destroyed business would be adequate and, thus, irreparable harm was not demonstrated. Additionally, even where destruction of a business is threatened, recent decisions have denied an injunction where the opposing party would be adversely impacted thereby tipping the balance of equities.
Appellate Precedent
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