a. Plaintiff’s Submissions Fail to Present Clear And Conclusive Evidence of Irreparable Harm
First, as to the issue of a remedy at law, the Note in the case at bar provides for a monetary remedy in the event of a breach of the contract. Rotman Dec. Exh. 1, ¶¶ 1.2(c), 1.4(g). This provision has been held to be an adequate remedy at law in the form of monetary damages precluding a finding of irreparable harm. Vis Vires Group, Inc., 149 F.Supp.3d at 391. Second, Vystar shares are publicly traded and available on the open market. Rotman Dec. ¶3. There is no argument by Plaintiff to the
contrary. Last, regardless of the validity of the figure, Plaintiff sets forth the exact amount of damages it believes it is entitled to due to the alleged breach, confirming that money damages are available and an adequate remedy at law. See Complaint, ¶57.
The only basis for irreparable harm argued by Plaintiff is that, in the event of a finding in its favor, Vystar may not be able to pay the judgment. In support of its motion Plaintiff ignores recent authority and instead relies upon cases such as Castle Creek Tech Partners v. Cellpoint, Inc., 2002 WL 31958696 (S.D.N.Y Dec. 6, 2002) and Brenntag Int’l Chems. Inc. v. Bank of India, 175 F.3d 245, 249 (2d Cir. 1999) for the proposition irreparable injury can exist where, but for the equitable relief sought, upon a final resolution there is a substantial chance the parties cannot be returned to positions they previously occupied because Vystar may be insolvent. P.Mem. p.14. Castle Creek is Case 1:19-cv-01545-ALC Document 33 Filed 04/05/19 Page 22 of 25
23 easily distinguishable as in that case there was no claim for monetary damages, rather, just a claim for equitable relief. Brenntagg, relied upon by Plaintiff for the issue of injunctive relief due to insolvency, is readily distinguishable because the Supreme Court in Grupo Mexicano, 527 U.S. 308 “cast doubt on the continued vitality of the broad exception for insolvency outlined in Brenntag”. Vis Vires
Group, Inc, 149 F.Supp.3d at 392. Judge Spatt, when issuing the Vis decision that is on all fours to the case at bar, concluded such injunctive relief sought by the plaintiff was impermissible. Vis Vires
Group, Inc., 149 F.Supp.3d at 392.
Ignoring the law, Plaintiff then cites to boiler plate SEC filing language, more succinctly defined in the trade as a “going concern” qualification, which is an accounting term and practice required by auditors for such public companies to assure protection against any litigation brought by investors in such a public company. Rotman Dec. ¶21. Indeed, Plaintiff was well aware of this language, as it was contained in the 2017 SEC Form 10-Q filed by Vystar months before the underlying transaction at issue in the case. Id. Exh. 9; Oaktree Capital Mgmt., LLC v. Spectrasite Holdings, Inc., 2002 WL 32173072, at *7 (D. Del. June 25, 2002) (as to issue of insolvency serving as the basis for irreparable harm, denying injunctive relief noting the plaintiff invested with full knowledge of this possibility)
This language obviously was sufficient enough for Plaintiff to rely upon to invest in Vystar and did not disqualify Vystar then, and now that same language cannot be inappropriately utilized as a sword against the mechanisms Plaintiff set up.
Nothing in the submission by Plaintiff proves an imminent inability to pay the same. Nothing in Plaintiff’s submission contradicts that in Vystar was, and continues to be, an ongoing viable Case 1:19-cv-01545-ALC Document 33 Filed 04/05/19 Page 23 of 25 24 business. Not surprisingly, Plaintiff glosses over Note 12, contained in the 2018 Form 10-Q that contradicts the totality of Plaintiff’s motion. See Preston Dec. Exh. D (bearing the designation of page 25 of 39 by the Court filing system).
First, reviewing Note 12 the Court will find that the Company increased the authorized shares of common stock to 975,000,000, providing more than ample stock to pay any corresponding obligation payable in shares. Id. Second, from an ongoing business viability, the Court will see,
specifically point 8, that Vystar is in the process of acquiring between 58% and 100% of the assets of Murida Furniture Company, Inc. Id. Murida is a company generating at least $30,000,000 in revenues annually. Rotman Dec. ¶25. Additionally, point 9 in Note 12 of the 10Q further identifies Vystar is in the process of acquiring the assets of Fluid Energy. Moreover, on March 6, 2019, FirstFire Global Opportunities Fund, LLCs invested in Vystar in an equity only deal for common shares in the amount of $200,000, providing Vystar even additional capital. Id. Exh. 13
A few additional points on financial viability. Vystar has recently paid off all of its debt as to third party corporate convertible notes (non-insider), specifically paying off two loans from Peak
One and Powerup Lending Group, Ltd. Rotman Dec. ¶28, Exhs. 10-13.
Last on this point, Plaintiff ignores the October 2018 legal opinion of its own counsel concerning Vystar’s financial wherewithal. Id., Exh. 14 (“The Company’s financial statements are consistent with an operating business.”) Plaintiff’s claim of Vystar’s demise is not only greatly
exaggerated. Nothing submitted by Plaintiff provides “ample evidence” that Vystar is not an ongoing, viable business or that insolvency is likely and imminent. Vis Vires Group, Inc, 149 F.Supp.3d at 396 citing Piotal Payments, Inc. v. Philips, 2014 WL 667421, at *4 (E.D.N.Y. Nov.
25, 2014). Case 1:19-cv-01545-ALC Document 33 Filed 04/05/19 Page 24 of 25 25
4. Substantial Disputes Over Material Facts Preclude Summary Judgment
A motion for summary judgment requires evidence, not arguments from counsel, and nothing
in the Preston Declaration supports the aforementioned quoted sentence. As set forth in the
statement of facts, the following material factual questions preclude the relief sought: (i) what is the
principal amount lent; (ii) from the March 8, 2018, deposit of $72,300, what was the interest that
accrued: (iii) were the fees Plaintiff earmarked for legal fees actually paid to counsel; and (iv) based
upon the amount due (including actual principal amount, interest amount and determination as to
whether the purported legal fees are to be deducted therefrom), how much did Vystar overpay
Plaintiff? These questions go directly to the issue of Plaintiff’s performance and Vystar’s compliance
in with its obligations due to Plaintiff. More importantly, these questions preclude the granting of
the motion.
CONCLUSION
For the foregoing reasons, Vystar respectfully requests that the Court deny Plaintiff’s motion
in full.
Dated: Morristown, New Jersey
April 5, 2019 Law Offices of Barry M. Bordetsky
By /s/Barry Bordetsky
Barry M. Bordetsky (BB4218)
Attorneys for Defendant
22 N. Park Place
Morristown, NJ 07960
Tel. No.: 973-998-6596
