Boreyko’s proposed AZPACK sale denied
In November last year BK Boreyko requested court-approval to sell of his share in AZPACK Properties LLC.
The FTC objected to the proposed sale, on the ground that AZPACK Properties was a holding company for real-estate properties. The FTC contended that the sale of Boreko’s share in AZPACK violated the terms of the Vemma preliminary injunction in place, which prohibit Boreyko from selling off real-estate.
Boreyko argued that he was just selling shares in an LLC, which in and of itself was not tied to any specific real-estate.
Judge Tuchi finally made a ruling on the matter earlier today, denying Boreyko’s proposed sale in full.
The Court disagrees with Mr. Boreyko. He is a 25 percent owner of an LLC whose principal, if not only, asset is the real estate in question, and whose purpose is to hold that real estate.
That 25 percent ownership by itself provides him significant “control” of the real estate as contemplated in the Order; such control is augmented by the fact that two of the three other members of AZPACK are employees and subordinate officers of Vemma and therefore Mr. Boreyko.
And to sell the interest in the LLC in this case is to sell the real estate that makes up the asset of the LLC, within both the meaning and intent of the Preliminary Injunctive Order.
Tuchi claimed that the preliminary injunction was carefully thought out so as to balance
the high burden the FTC had to meet to secure a freeze and the hardship an asset freeze would work on Mr. Boreyko, on the one hand, against the need to preserve assets to satisfy any judgment that might result from final orders after trial.
For Mr. Boreyko to now argue that he may properly sell his interest in AZPACK, whose value is coterminous with its real estate holdings, misses the point of the Order and is overreaching.
The Court concludes that the sale of Mr. Boreyko’s 25 percent interest in AZPACK is prohibited by the Preliminary Injunction. It will therefore deny the Motion to Approve Sale.
Boreyko had wanted to inject proceeds of the sale into Vemma, and claimed that a denial of the proposed sale would “greatly harm Vemma”.
Footnote: Our thanks to Don@ASDUpdates for providing a copy of Judge Tuchi’s January 15th order.