Although Mrs. Cafritz will undoubtedly suffer a reduction in her income stream if the restraining order is granted, this does not ipso facto prove a substantial harm. Mrs. Cafritz has asserted the vitality of her husband's financial condition throughout her papers, see, e.g., Affidavit of Peggy Cooper Cafritz para. 2, and the Court has no reason to believe that a serious change in her lifestyle will result from issuance of a temporary order of this nature. Thus, at this juncture, the Court concludes that no substantial harm would result vis-a-vis Mrs. Cafritz and the retention of the cash assets.
If the Court were to freeze Mr. Cafritz's assets, his ability to retain counsel in the event of a bankruptcy petition may be hampered. The Court must weigh this harm against the Congress' desire to recoup monies which the FDIC alleges were wrongfully obtained by, or in the possession of, Mr. Cafritz by virtue of his failure to repay monies owed to the FDIC. In balancing these competing interests, and in view of the fact that there is no right to counsel in bankruptcy, the Court concludes that the harm to Mr. Cafritz is not substantial and that temporary restraining order should issue.
Upon consideration of the pleadings, the record developed thus far and the applicable law, the Court finds that there is a substantial likelihood that the FDIC will prevail on the merits of the claims asserted in its complaint. Moreover, the Court finds that the compelling interest in protecting the taxpayers' investment in the depository insurance fund and the lack of substantial harm to the interested parties weighs in favor of granting the relief sought by the FDIC. Because the Court grants the FDIC's request to freeze assets not to exceed $ 18 million, the Court hereby appoints the Citizens Bank of Maryland as trustee to receive, manage and exercise dominion and control over these assets during the pendency of this litigation. The Court will issue an order of even date herewith consistent with this Memorandum Opinion.
TEMPORARY RESTRAINING ORDER - April 26, 1991, Filed
Upon consideration of the plaintiff's application for a Temporary Restraining Order, pursuant to 12 U.S.C. §§ 1821 (d)(18) and (19), the defendants' responses thereto, the record and the applicable law, and in accordance with this Court's Memorandum Opinion of even date herewith, it is, by this Court, this 26th day of April, 1991,
ORDERED that the plaintiff's application for a temporary restraining order shall be, and hereby is, granted; and it is
FURTHER ORDERED that assets of the defendants, as described herein, shall be placed, as hereinafter provided, under the control of the Citizens Bank of Maryland, as trustee; and it is
FURTHER ORDERED that the following assets shall be transferred to the trustee on or before 4:00 p.m. on April 29, 1991:
-- Mr. Cafritz shall immediately cause the law firm of Weil, Gotshal & Manges to transfer to the trustee the sum of $ 1.5 million, representing the retainer fee in payment for future legal services, on or before 4:00 p.m. on April 29, 1991, and that Weil, Gotshal & Manges, being officers of the Court and having notice of this action, shall comply with this Order in all respects at once;
-- Mrs. Cafritz shall immediately transfer to the trustee those assets which were the subject of the April 24, 1990 transaction with Mr. Cafritz, namely the $ 760,000 cash and the 8 1/3 percent vested remainder interest, which is valued at approximately $ 7 million, on or before 4:00 p.m. on April 29, 1991;
-- Mr. Cafritz shall immediately transfer to the trustee assets, representing the remainder of the $ 18 million owed to the FDIC under the outstanding loan agreements, of whatever variety, provided these assets have a current fair market value of approximately $ 9 million, on or before 4:00 p.m. on April 29, 1991; and it is
FURTHER ORDERED that the parties shall appear before the Court at 2:00 p.m. on May 1, 1991 for a status conference at which time the Court will schedule a further hearing or trial in this matter.
ORDER - April 26, 1991, Filed
The Court has noticed two non-substantive typographical errors in the Memorandum Opinion issued on April 26, 1991.
Accordingly, it is, by this Court, this 26th day of April, 1991,
ORDERED that footnote 1 should be amended to read:
"This statute was enacted as part of the Crime Control Act of 1990. See Crime Control Act of 1990, Pub. L. No. 101-647, tit. 15, § 2500 et seq., 104 Stat. 4859-4879."; and it is
FURTHER ORDERED that, in order to be consistent with the remainder of the Memorandum Opinion, line 8, on page 11 should read "In fact, a court could conclude . . ." rather than "In fact, a jury could conclude. . . ."