The Appellate Division affirmed the Order which, to the extent appealed from, denied plaintiff's motion to seize collateral located at defendant's premises, pursuant to CPLR 7102 and UCC 9-609(a), or, in the alternative, to appoint a temporary receiver, pursuant to CPLR 5228 and 6401. Plaintiff has not established that it is entitled to the remedy of seizing the collateral in defendants possession, which requires a showing of the probability of success on the merits. Plaintiff's probability of success is also affected by the fact that it is seeking to remove fixtures in the restaurant that may be the property of the nonparty landlord.
Nor did the court improvidently exercise its discretion in denying the motion to appoint a receiver. Pursuant to CPLR 6401(a), it is necessary to show that the property in question is in danger of being removed from the state, or lost, materially injured or destroyed. Plaintiff has made no such showing. To the extent that the collateral is in defendant's possession, plaintiff does not allege that defendant is trying to move the property out of state or that the property is in danger of being lost, materially injured, or destroyed. By all accounts, defendant is simply operating the pizzeria in the ordinary course of business, and there has been no showing that defendant is insolvent or related to the debtor, or that defendant did not pay a substantial sum to obtain the collateral. Thus, there is not the requisite special reason to appoint a receiver.
Itria Ventures LLC v. Beaver St. Pizza LLC, NY Slip Op 02874 (1st Dep't May 6, 2021)
