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Tkhilaishvili v. Torosyan

Superior Court of Massachusetts, Suffolk, Business Litigation Session

May 6, 2016

David Tkhilaishvili et al.
Vahagn Victor Torosyan et al No. 134123


          Mitchell H. Kaplan, Justice

         This case arises out of a dispute between the plaintiffs, David and Jambulat Tkhilaishvili (hereafter David and James, respectively), who are brothers, and the defendant, Vahagn Victor Torosyan, all of whom hold (or held) interests in the defendant, Allied Health Clinic, LLC (Allied), a limited liability company formed to operate a suboxone clinic in Quincy. Torosyan, acting pursuant to what he maintains are rights afforded him under Allied's Operating Agreement, asserts that he has properly removed David as his co-manager of Allied and forfeited both Davids' and James' ownership interest in Allied. The case came before the court this day on David's and James' motion for a preliminary injunction restoring them to their prior positions, salaries, benefits, and ownership interests in Allied, as they existed prior to Torosyan's unilateral actions.

         David had previously run a suboxone clinic at the same Quincy location, which failed in the summer of 2014 and is the subject of litigation in pending in the Norfolk Superior Court. He came to Torosyan for financial assistance. The parties entered into preliminary agreements in late 2014 pursuant to which Torosyan would loan funds to restore the clinic under new ownership; the current Allied Operating Agreement was executed in September 2015. In October 2015, Allied received a license to operate from the Department of Public Health and first began treating patients in November. It did not generate any revenue until late January 2016. It is presently still operating at a loss.

         Beginning in late 2014, Torosyan has provided all of the financing required to prepare Allied to begin business and is presently funding its operating losses. He has invested more than $900, 000 of his own money in Allied since that time. David and James have not contributed any funds to Allied during that period (although they maintain that Allied is using equipment and furnishings they purchased for the clinic that failed in 2014). The Allied Operating Agreement essentially provides Torosyan with a unilateral right to direct the affairs of Allied, until all the money that he has advanced to Allied is repaid.

         The parties have filed conflicting affidavits concerning the disputes that arose between them beginning in approximately November 2015. David and James maintain that Torosyan, who was not supposed to be actively involved in the operations of Allied, has wrongfully taken on the role of manager, poorly run the enterprise, and then acted unilaterally to oust them from Allied and deprive them of, not only salary and benefits, but also their ownership interests. They also assert that Torosyan has acted aggressively toward them. Torosyan, on the other hand, maintains that he discovered that both brothers paid for personal expenses using Allied's funds and that David misappropriated $11, 000 from the business. He also asserts that beginning in November, David and James demanded that he give some of his ownership interests in Allied to friends of theirs and renounce his right to direct Allied's affairs until his investment is repaid.

         According to Torosyan, David and James threatened him and his family with physical harm if he did not comply with their demands. James also threatened to burn down the clinic. They professed to have relationships with members of the Russian mafia. (The specific language that Torosyan attests David and James directed at him is disturbing, but need not be repeated here.)

         In response to these alleged threats, Torosyan sought advice from counsel, who recommended the course of action that has led to this litigation.


         This case is before the court on the plaintiffs' motion for a preliminary injunction. To succeed on their motion, plaintiffs therefore bear the burden of showing: (1) a likelihood of success on the merits of their claims; (2) that they will suffer irreparable harm if injunctive relief is not granted; and (3) that their harm, if injunctive relief is denied, outweighs any harm that would be suffered by the defendants if the relief were granted. See Boston Police Patrolmen's Ass'n, Inc. v. Police Dept. of Boston, 446 Mass. 46, 49-50, 841 N.E.2d 1229 (2006); Packaging Indus. Group, Inc. v. Cheney, 380 Mass. 609, 616-17, 405 N.E.2d 106 (1980). In this case, the court need not go further than noting that, on the record before it, it does not find that the plaintiffs have established a likelihood of success on the merits. The plaintiffs' motion is premised entirely on the averments set out in their affidavits. There is no corroborating evidence. The court need not decide whether it finds the plaintiffs' assertions more credible than the defendants', even equipoise is insufficient to support the motion for a preliminary injunction, and the court does not find their averments more credible than Torosyan's.

         Additionally, on the question of which parties are the more likely to suffer irreparable harm if relief is granted or denied, Torosyan has now contributed more than $900, 000 to this enterprise. He is still funding operating losses. If the clinic fails, his loss will far exceed any monetary loss that the plaintiffs might suffer. Torosyan also has an obvious and significant interest in seeing Allied succeed. That appears to be the only way in which he can recover his investment. Although his principal business is operating an auto repair shop, he is working regularly at the clinic without pay and has retained professional consultants to assist.

         The court does have some uncertainty concerning the provisions of the Operating Agreement that purportedly authorize Torosyan to cause James and David to forfeit their entire ownership interests in Allied based on Torosyan's unilateral determination that they breached a fiduciary duty due him. In consequence, the court will enter relief that precludes any transfer or encumbrance of the units in Allied previously held by James or David pending the outcome of this case. Such a transfer could make it difficult to " unscramble the eggs, " if David and James ultimately prevail in this litigation, or at least so much of it as asserts a right to units in Allied.


         For the foregoing reasons, the plaintiffs' motion for a preliminary injunction is DENIED, except that the defendants are preliminarily enjoined from transferring, encumbering, or alienating the ownership interests in Allied ...

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