Emergency Court Relief in New York: TROs Explained

A bank closes a business account and keeps the balance “under review.” A landlord’s notice to cure expires in ten days.

A partner starts moving company money. In each case an ordinary lawsuit is too slow.

New York courts can act within days through a temporary restraining order (TRO) and preliminary injunction.

Dilendorf Law Firm represents companies and individuals in New York in these proceedings, including disputes over closed or frozen bank, brokerage and digital-asset accounts.

What a TRO Does

A TRO preserves the status quo until the court hears a motion for a preliminary injunction, which then lasts until the case is decided.

The statute permits a TRO where “immediate and irreparable injury, loss or damages will result unless the defendant is restrained before a hearing can be had” [1].

A preliminary injunction is appropriate where a defendant “threatens or is about to do” an act “in violation of the plaintiff’s rights respecting the subject of the action, and tending to render the judgment ineffectual” [2].

Ten Situations Where Emergency Relief Is Commonly Sought

1. Closed or frozen bank accounts. A bank ends the relationship after a compliance inquiry and withholds the balance indefinitely. Relief restrains disposition of the funds and seeks their release or deposit into court.
2. Brokerage, exchange and stolen-crypto freezes. Orders preserving traceable proceeds held at an exchange or custodian.
3. Commercial lease defaults. A “Yellowstone” injunction tolls the cure period so a tenant can litigate the default without forfeiting the lease [3].
4. Real estate contracts. Restraining a seller from conveying to a third party while the buyer sues for specific performance, paired with a notice of pendency.
5. Foreclosure and UCC sales. Halting a mortgage auction or a mezzanine lender’s Article 9 sale where notice or commercial reasonableness is contested.
6. Partnership and LLC disputes. Stopping a co-owner from draining accounts or locking others out.
7. Departing employees. Restraining use of confidential information and customer solicitation while a restrictive covenant is litigated.
8. Escrow and processor holds. Preserving escrowed funds or processor reserves a counterparty threatens to release or apply.
9. Hijacked domains and business accounts. Restoring control over domain names, websites and platform logins.
10. Disputes headed to arbitration. A court may grant a preliminary injunction or attachment in aid of arbitration where the award “may be rendered ineffectual” without it [4].

How the Procedure Works

Emergency relief is sought by order to show cause rather than ordinary notice of motion.

New York does not favor surprise. A TRO will not be issued without notice unless the movant shows “significant prejudice” from giving it; the adversary must be told the time, date and place of the application and receive the papers [5].

In New York County the proposed order is e-filed and screened by the Ex Parte Office or, for Commercial Division cases, the Commercial Division Support Office, before the assigned judge signs or declines it.

The judge may hear both sides on the TRO, set a return date one to three weeks out, and direct how the order is served. A bond, called an undertaking, is required for a preliminary injunction and may be required for a TRO; the amount is discretionary [6].

The Irreparable Harm Test

A movant must show “a probability of success on the merits, danger of irreparable injury in the absence of an injunction and a balance of equities in its favor” [7].

Irreparable harm is the element most often lost. Harm that money can later repair does not qualify, and the Court of Appeals has held that a plaintiff seeking only a money judgment cannot freeze a defendant’s assets as security for it [8].

Two exceptions matter in account disputes.

First, the same decision recognizes that an injunction is proper where the claim is to “a specific fund” that is “the subject of the action” — for example, the balance of a closed account that the bank’s own agreement obligates it to pay over [8].

Second, the threatened destruction of a business is not merely a money problem. The First Department holds that “the loss of goodwill of a viable, ongoing business may constitute irreparable harm” [9].

And the Third Department affirmed an injunction directing a bank to restore account access where the plaintiffs’ treasurer detailed the inability “to make timely payments to car manufacturers, lenders and the dealerships’ employees” [10].

The lesson is specificity. An affidavit that names the payroll date and amount, attaches the supplier’s credit-hold notice and identifies the orders at risk will succeed where a general statement of hardship will not.