Leadenhall Capital Partners LLP v. Advantage Capital Holdings, LLC

── Leadenhall Capital Partners LLP v. Advantage Capital Holdings, LLC ── Case No.: 24-2647 Court: Court of Appeals for the Second Circuit Date: March 23, 2026 Category: General 24-2647 (L) Leadenhall Capital Partners LLP v. Advantage Capital Holdings, LLC In the United States Court of Appeals for the Second Circuit August Term 2024 Argued: April 1, 2025 Decided: March 23, 2026 Nos. 24-2647 (L), 24-2867 (Con) LEADENHALL CAPITAL PARTNERS LLP, LEADENHALL LIFE INSURANCE LINKED INVESTMENTS FUND PLC, Plaintiffs-Appellees, ING CAPITAL LLC, HAYMARKET INSURANCE COMPANY, ACM DELEGATE LLC, NATIONAL FOUNDERS LP, Intervenors, v. ADVANTAGE CAPITAL HOLDINGS LLC, KENNETH KING, 777 PARTNERS LLC, 600 PARTNERS LLC, SPLCSS III LLC, SIGNAL SML 4 LLC, INSURETY AGENCY SERVICES LLC, DORCHESTER RECEIVABLES II LLC, Defendants-Appellants, JOSH WANDER, STEVEN PASKO, SUTTONPARK CAPITAL LLC, SIGNAL MEDICAL RECEIVABLES LLC, INSURETY CAPITAL LLP, SUTTONPARK SERVICING LLC, SIGNAL SERVICING LLC, INSURETY SERVICING LLC, Defendants. Appeal from the United States District Court for the Southern District of New York Docket No. 1:24-cv-3453, John G. Koeltl, District Judge. Before: SACK, PÉREZ, and MERRIAM, Circuit Judges. This appeal is about whether the District Court had the equitable power in this case to freeze the guarantors’ assets upon the borrowers’ default. Defendants- Appellants are guarantors, who assert that the District Court (Hon. John G. Koeltl, J.) abused its discretion in granting a preliminary injunction freezing their assets based on the District Court’s conclusion that Plaintiffs had sufficient contractual and equitable interests in those assets. Plaintiffs are a pair of lenders who sued debtor Defendants for breach of contract to collect on their debt. In the same action, Plaintiffs also sued the entities that guaranteed the debt—the guarantor Defendants-Appellants. Worried that guarantor Defendants would dispose of their assets before Plaintiffs could secure a final judgment, Plaintiffs moved for a preliminary injunction freezing both debtor and guarantor Defendants’ assets. The District Court granted the preliminary injunction, and Defendants appealed. On appeal, Defendants argue that freezing the guarantor Defendants’ assets was in contravention of the Supreme Court’s decision in Grupo Mexicano De Desarrollo, S.A. v. Alliance Bond Fund, Inc., 527 U.S. 308 (1999), which held that a court cannot issue a preliminary injunction freezing assets in which no lien or equitable interest is claimed. We agree. Plaintiffs have not demonstrated a lien or equitable interest in guarantor Defendants’ assets: they point to no current legal interest in guarantor Defendants’ property, and they do not seek ultimate relief that gives rise to an equitable interest. Accordingly, we VACATE the portion of the District Court’s preliminary injunction order restraining guarantor Defendants’ assets and REMAND for further proceedings consistent with this opinion. JONATHAN M. WATKINS, (Michael E. Petrella, Matthew M. Karlan, on the brief), Cadwalader, Wickersham & Taft LLP, New York, NY, for Defendants-Appellants Advantage Capital Holdings LLC and Kenneth King JOHN G. MCCARTHY, Smith, Gambrell & Russell, LLP, New York, NY, for Defendants-Appellants 777 Partners LLC, 600 Partners LLC, SPLCSS III LLC, Signal SML 4 LLC, 2