The following e-filed documents, listed by NYSCEF document number (Motion 002) 21-39, 41-51 were read on this motion to/for PRELIMINARY INJUNCTION. DECISION + ORDER ON MOTION Petitioners Conlon Holdings LLC and ConlonBeithir LLC (“Petitioners”) move by Order to Show Cause (Mot. Seq. No. 2) for an order preliminarily enjoining Respondents Chanos & Company LP (formerly known as Kynikos Associates LP; the “Company”) and James S. Chanos (collectively “Respondents”) pursuant to CPLR §§6301, 7502, 5106, 5228, and 6401 as follows: (a) that Respondents shall be restrained and enjoined from transferring the proceeds of the sale of the property located at 100 S. Pointe Drive, Miami Beach, Florida (“Miami Residence”); (b) that Kynikos Associates Ltd (“Kynikos”), General Partner of Chanos & Company LP, shall be removed as General Partner of Chanos & Company LP and shall not hold that position at the Company in the future unless and until agreed by a majority of disinterested Partners (excluding Mr. Chanos from such vote as an interested party); and (c) that a temporary receiver shall be appointed for the Partnership, defined as Kynikos and the Company, until such time that the non-interested partners vote to appoint a new General Partner. Relevant Factual and Procedural Background This proceeding arises from Petitioners’ application seeking to enjoin Respondents from transferring the proceeds from the sale of the Miami Residence in aid of a pending arbitration, in which Petitioners (as Claimants) seek recovery from Respondents1 Chanos & Company LP, Kynikos, James S. Chanos LLC, George Liberopoulos, and MJGM LLC for breach of contract and breach of fiduciary duty, among other claims. Here, Petitioners resolve that Respondents will “abscond with monies” absent relief from the Court and render any relief from a successful arbitration as ineffectual. The parties entered into a business arrangement in early 2020 whereby Petitioners made an investment of $7 million into the Company, making Petitioners Limited Partners of the Company. See NYSCEF Doc. Nos. 24 (2/10/20 Seventh Amended and Restated Agreement of Limited Partnership of Kynikos Associates LP), 25 (3/9/20 Eighth Amended and Restated Agreement of Limited Partnership of Kynikos Associates LP). Prior to Petitioners’ involvement and investment in the Company, Mr. Chanos, in his individual capacity, entered into a loan agreement with the Company on December 31, 2018 (“Loan Agreement”). NYSCEF Doc. No. 43 (12/31/18 Loan Agreement). The terms of the Loan Agreement state that Mr. Chanos, as “Borrower,” received and promised to pay to the “Limited Partners except for James S Chanos LLC of Kynikos Associates LP,” as “Lender,” the sum of $15,989,102.00 (the “Loan”). The Loan Agreement further provides: The Borrower agrees to provide Art Pieces, New York City Residence (3 East 75th Street, New York, NY 10021), Miami Residence (100 S Pointe Drive, Miami, FL 33139), and East Hampton Residence (70 Further Lane, East Hampton, NY 11937), referred to as the “Security”, which shall transfer to the possession and ownership of the Lender IMMEDIATELY if this Loan should be in default. The Security may not be sold or transferred without the Lender’s consent during the course of this Loan. Id. The Loan Agreement is signed by Mr. Chanos, as Borrower, and Brian Nichols, on behalf of Lender Kynikos Associates LP. On May 8, 2019, Mr. Chanos provided a letter to Charles Hobbs, Brian Nichols, Robert Veninata, and Alan Best stating that he has “contributed art in the amount of $12,495,359 with a $3.5 million line of credit to Kynikos Associates LP;” and that Kynikos Associates LP “intends to sell the art and the proceeds will be used in partial satisfaction of my negative capital balance and my outstanding demand loan (see December 31, 2018 Loan Agreement).” NYSCEF Doc. Nos. 9 (5/8/19 Letter), 7 at 7 (Nichols Aff.). On March 3, 2021, Mr. Chanos wired $16 million to the Lender towards the outstanding balance of the Loan and accrued interest. NYSCEF Doc. Nos. 45 (3/3/21 Citibank Statement), 42 (Chanos Aff.) at
17-19. He subsequently contributed an additional $1.3 million to the Company in the first quarter of 2021. NYSCEF Doc. No. 42 at
