Case 2:14-cv-00916-BSJ Document 81 Filed 05/07/15 Page 1 of 19

Ralph R. Mabey (2036)

rmabey@kmclaw.com
R. Willis Orton (2484)
worton@kmclaw.com
Ryan B. Frazier (9007)
rfrazier@kmclaw.com
Kirton McConkie
Kirton McConkie Building
50 East South Temple, Suite 400
Salt Lake City, Utah 84111
Telephone: 801-328-3600
Fax: 801-321-4893

Scott S. Morrisson, pro hac vice

smorrisson@kdlegal.com
Jeffrey C. McDermott, pro hac vice
jmcdermott@kdlegal.com
Krieg DeVault LLP
12800 North Meridian Street, Suite 300
Carmel, Indiana 46032
Telephone: 317-566-1110
Fax: 317-636-1507

Attorneys for Defendant Bankers Trust

Company of South Dakota

Jude Anne Carluccio, pro hac vice

jcarluccio@kdlegal.com
Krieg DeVault LLP
60 South 6th Street, Suite 2310
Minneapolis, Minnesota 55402
Telephone: 612-564-1924
Fax: 612-326-0996

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH

CENTRAL DIVISION

KELLEY JESSOP, an individual, on behalf of

himself and all others similarly situated,
Plaintiff,
v.
DALLIN LARSEN, an individual, HENRY
MARSH, an individual, RANDY LARSEN, an
individual, MACHIEL KENNEDY, an
individual, RALPH CARSON, an individual,
AMY COWLEY, an individual, MARK
RAWLINS, an individual, PORTER HALL, an
individual, STEPHEN J. HALL, an individual,
DOES 1-10, and BANKERS TRUST
COMPANY, a Delaware corporation,
Defendants.

DEFENDANT
BANKERS TRUST COMPANYS
CONSOLIDATED MOTION FOR
TEMPORARY RESTRAINING ORDER
AND PRELIMINARY INJUNCTION
AND MEMORANDUM IN SUPPORT
Civil No. 2:14-cv-00916
Honorable Bruce S. Jenkins
ORAL ARGUMENT REQUESTED

Case 2:14-cv-00916-BSJ Document 81 Filed 05/07/15 Page 2 of 19

BANKERS TRUST COMPANY OF SOUTH

DAKOTA, a South Dakota corporation,
Third-Party Plaintiff,
v.
MONA VIE, INC., a Utah corporation,
Third-Party Defendant.

Pursuant to Federal Rules of Civil Procedure 7 and 65 and DUCivR 7-1, Defendant and
Third-Party Plaintiff Bankers Trust Company of South Dakota, improperly named in the
Complaint as Bankers Trust Company, a Delaware Corporation (BTC), by and through its
counsel, respectfully submits this Consolidated Motion for Temporary Restraining Order and
Preliminary Injunction (the Motion). By the Motion, BTC seeks an order enjoining ThirdParty Defendant Mona Vie, Inc. (Mona Vie) and its Board of Directors (the Board) from
(1) consenting to a proposal that Mona Vie and its Board consent or agree to a strict
foreclosure of Mona Vies assets pursuant to Utah Code 70A-9a-620, and (2) from taking any
actions or executing any documents transferring any assets of Mona Vie and/or any of its
affiliates to Jeunesse Global, LLC, any of its affiliates, and/or any third parties (collectively,
Jeunesse) until BTC has an opportunity to properly evaluate Mona Vies proposed action.
Pursuant to DUCivR 7-1(a)(1), BTC respectfully provides the following memorandum in support
of the Motion.

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SUCCINCT STATEMENT OF THE PRECISE RELIEF SOUGHT

AND THE SPECIFIC GROUNDS THEREFOR
By this Motion, BTC seeks a temporary restraining order and preliminary injunction
immediately enjoining Third-Party Defendant Mona Vie, Inc. (Mona Vie) and its Board of
Directors from (1) consenting to a strict foreclosure of all or virtually all of Mona Vies assets
and (2) from taking any actions or executing any documents transferring any of Mona Vies
assets to Jeunesse Global, LLC and/or any of its affiliates (collectively, Jeunesse). Federal
Rule of Civil Procedure 65 authorizes such relief where, as here: (1) BTC is likely to succeed on
the merits of its underlying claims or there are questions going to the merits that are so serious,
substantial, difficult, and doubtful as to make the issue ripe for litigation and deserving of more
deliberate investigation; (2) BTC and the Mona Vie, Inc. Employee Stock Ownership Plan (the
MV ESOP) are likely to suffer irreparable harm in the absence of such an injunction;
(3) absent the requested injunction, the irreparable harm BTC and the MV ESOP are likely to
suffer far outweighs any damage Mona Vie, its Board, and/or Jeunesse may incur as a result of
the injunction; and (4) the injunction requested in this case is in the public interest. BTC
requests an opportunity to evaluate the action Mona Vie announced yesterday that it planned to
take. Accordingly, for the reasons set forth and discussed in greater detail below, the instant
Motion should be granted.
REQUEST FOR ORAL ARGUMENT
Pursuant to DUCivR 7-1(f), BTC hereby respectfully requests oral argument on the
Motion. This request is supported by good cause in as much as a temporary restraining order and
preliminary injunction represent extraordinary relief thus counseling in favor a full opportunity
for both parties to be heard. For this reason, BTC hereby requests oral argument on the Motion.
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INTRODUCTION
On information and belief, Mona Vie entered into a Note Purchase Agreement dated
November 17, 2010, with various parties, including TSG-MV Financing LLC (TSG-MV
Financing), and under that Note Purchase Agreement, Mona Vie issued a single note to
TSG-MV in the approximate amount of $182,000,000. That Note Purchase Agreement was later
amended by a binding Memorandum of Agreement Modification of Note dated November 17,
2013.
Mona Vie has advised BTC that the Note is secured by essentially all of the assets of
Mona Vie. (May 6, 2015 Notice, Ex. 1 to Storjohann Decl., Ex. A hereto.) Apparently, on
or about March 13, 2015, Jeunesse purchased the Note and acquired all loan and security
documents (the Note Sale). Neither Mona Vie nor any other entity apprised BTC of the Note
Sale until after the Note Sale had occurred. BTC asked Mona Vie to keep BTC informed
relating to the Note, but Mona Vie has failed to do so.
BTC did not receive any more information about the Note until it received a blast email
on May 6, 2015 from Mona Vies Chairman of the Board, Mauricio Bellora (Bellora) advising
Mona Vie shareholders of the intention of Mona Vies Board to consent to a strict
foreclosure (the May 6, 2015 Notice). (May 6, 2015 Notice, Ex. 1 to Storjohann Decl., Ex.
A hereto.) The May 6, 2015 Notice disclosed that Mona Vie was in default under the Note and
that Mona Vie and its Board had received from Jeunesse a proposal that [Mona Vie and the
Board] agree to a strict foreclosure of virtually all of Mona Vies assets. (Id.) According to
the May 6, 2015 Notice, a strict foreclosure means that Mona Vie would voluntarily transfer
substantially all of the assets of Mona Vie and its subsidiaries to Jeunesse or its nominee in

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exchange for Jeunesse deeming the Note paid and satisfied in full. (Id.) As a result, virtually
no assets would remain in [Mona Vie] or its subsidiaries. (Id.) Instead, Mona Vie would only
retain various liabilities (and have no assets with which to pay such liabilities). (Id. (emphasis
added).)
Importantly, the Notice also made clear that as a shareholder of Mona Vie, [the MV
ESOPs] shares will also effectively become worthless. (Id. (emphasis added).) The MV ESOP
would then have no value, and the beneficiaries of the MV ESOP would receive nothing. BTC,
the MV ESOPs trustee, was given no prior notice of the proposed strict foreclosure. BTC has
not been advised of the details regarding the underlying debt obligations evidenced by the Note
and the Note Sale. BTC cannot fully evaluate the propriety of whether Mona Vie is justified in
consenting to the strict foreclosure.
Under Utah Code Section 70A-9a-620, Mona Vie, through its Board, must consent to the
strict foreclosure. The May 6, 2015 Notice informed shareholders that Mona Vie and its Board
of Directors have elected to consent to the strict foreclosure,1 which would result in a transfer
of virtually all of Mona Vies assets in the next few days. (Id. (emphasis added).) On May 7,
2015, BTCs counsel objected to Mona Vie consenting to the strict foreclosure under Utah Code
Section 70A-9a-101 et seq. because, among other things, the value of shares held by the MV
ESOP will be rendered valueless if the strict foreclosure goes forward and because BTCs
counsel had received no information about Mona Vies determination to engage in the strict
foreclosure procedure. A secured partys proposed strict foreclosure is invalid if it receives a
notification of objection from a person other than the debtor holding an interest in the
1

The Mona Vie Board may have already consented to the strict foreclosure. In that case, injunctive relief enjoining
the strict foreclosure is necessary.

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collateral subordinate to the security interest that is the subject of the strict foreclosure proposal.
UTAH CODE 70A-9a-620(1)(b)(ii). Additionally, a secured party that desires to undertake the
strict foreclosure procedure must send its proposal to any person from which the secured party
has received, before the debtor has consented to the acceptance, an authenticated notification of a
claim of an interest in the collateral. UTAH CODE 70A-9a-621(1)(a). BTC claims of interest in
Mona Vies assets as the trustee of the MV ESOP, who as trustee owes fiduciary duties to the
MV ESOPs beneficiaries (who are largely employees of Mona Vie). With no assets, the MV
ESOP and its retirement benefits to those employees becomes, as declared by Mona Vie,
worthless.
As a result of Mona Vies declared intention to consent to the strict foreclosure, BTC, the
MV ESOP, and other Mona Vie shareholders face a threat of imminent substantial and
irreparable harm. If an injunction is not issued to enjoin Mona Vies Board from consenting to
the strict foreclosure, according to Mona Vie, Mona Vies assets will be fully lost and the MV
ESOPs shares in Mona Vie would become worthless. Consequently, immediate injunctive relief
is necessary to enjoin Mona Vies Board from consenting to the strict foreclosure and/or
voluntarily transferring Mona Vies assets to Jeunesse in a strict foreclosure. Therefore, BTC
respectfully requests that the Motion be granted and the Court issue an order enjoining Mona Vie
and its Board from (1) consenting to a strict foreclosure of virtually all of Mona Vies assets
and (2) from taking any actions or executing any documents, or otherwise, transferring any of
Mona Vies assets to Jeunesse, until BTC has a chance to evaluate this matter and is provided the
necessary communications and support to render such evaluation.

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STATEMENT OF RELEVANT FACTS

1.

Mona Vie is a privately held company that manufactures and distributes products

made from blended fruit and vegetable juice concentrates, powders, and purees through
multilevel marketing.
2.

Mona Vie established for the benefit of certain eligible employees the MV ESOP,

an employee stock ownership plan, which was effective as of January 2, 2010.

3.

Mona Vie is the MV ESOP plan sponsor.

4.

The MV ESOP is an employee stock ownership plan described in sections

4975(e)(7) and 407(d)(6) of ERISA and owns Mona Vie stock.

5.

The MV ESOP is an employer-provided retirement benefit provided at no cost to

Mona Vies employees.

6.

BTC serves as the trustee of the MV ESOP. (Declaration of Scot Storjohann

(Storjohann Decl.), dated May 7, 2015, attached hereto as Exhibit A, at 3.)

7.

As trustee of the MV ESOP, BTC has certain fiduciary duties regarding the

participants of the MV ESOP.

8.

On or about March 13, 2015, Jeunesse purchased a note (Note) secured by

virtually all of Mona Vies assets. (See Supplemental Declaration of Scot Storjohann, dated
April 10, 2015, attached hereto as Exhibit C, 6.) Mona Vie did not advise BTC of the Note
Sale until after the Note Sale occurred. (Id. at 7.)
9.

Scot Storjohann of BTC remained in contact with Mona Vie regarding the Note

Sale. (See Storjohann Decl., Ex. A, 5.) For example, Mr. Storjohann participated in a
telephone conference call with Mona Vie regarding the Note Sale on Thursday, April 23, 2015.

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(Id.) Participants in that telephone call were Mr. Storjohann, Chris Staloch of Chartwell
Financial Group (Chartwell), Jude Anne Carluccio (BTCs counsel), Mona Vies Controller
Daren Haws, and Mona Vies counsel Graden Jackson. (Id.)
10.

The call was a follow up of the earlier April 10, 2015 telephone call with Daren

Haws, Mona Vies Controller, and the stated goal of the April 23, 2015 call was to provide BTC
and Chartwell, BTCs advisor on certain financial matters, with a more detailed update on the
current status of the Note Sale and other matters that could affect Chartwells ability to value the
MV ESOP stock. (Id.) Those representing Mona Vie gave no indication of or disclosed the
possibility or intention to proceed with a strict foreclosure procedure. (Id.) In fact, Mr. Jackson,
Mona Vies counsel, stated during the April 23, 2015 telephone call that nothing had changed to
report. (Id.)
11.

On May 6, 2015, Sandy Darlington of Mona Vie sent an email to Scot Storjohann

of BTC entitled Shareholder Communication from Mauricio Bellora (the May 6, 2015
Notice). A copy of the May 6, 2015 Notice is attached as Exhibit 1 to the Storjohann
Declaration, which is attached hereto as Exhibit A. (See Storjohann Decl., Ex. A, 4.)
12.

The May 6, 2015 Notice, which was received on May 6, 2015 at 12:50 p.m.

(CST) by Scot Storjohann Vice President of BTC, was the first communication that BTC
received from Mona Vie regarding Mona Vies intended proposed strict foreclosure procedure.
(Id.)
13.

The May 6, 2015 Notice informed BTC that Jeunesse had proposed a strict

foreclosure to Mona Vie and that Mona Vies Board had determined that Mona Vie would
consent to the strict foreclosure.

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14.

The May 6, 2015 Notice disclosed that Mona Vie was in default under the Note,

Jeunesse had proposed a strict foreclosure of Mona Vies assets, and Jeunesse had asked Mona
Vie to consent to the strict foreclosure:
We write to update you on the status of Jeunesse Global, LLC and/or its affiliates
(Jeunesse) purchase of the Promissory Note dated November 17, 2010 issued
pursuant to the Note Purchase Agreement dated November 17, 2010 between
Mona Vie, Inc. (the Company), MonaVie LLC, TSG and certain investors (the
"Note"). In addition to purchasing the Note, Jeunesse also acquired all related
loan and security documents, including the perfected security interests that TSG
held in the assets of the Company and its subsidiaries (collectively, the
Pledgors), and the subsidiaries guaranteed the Note. The Note is secured by
essentially all of the assets of the Pledgors (collectively, the Jeunesse
Collateral). As stated in our previous notice regarding the transaction, Jeunesse
acquired all of the rights of TSG under the Note and related loan and security
documents, including its rights as a secured creditor and lienholder to all of the
assets of the Pledgors. As a result of the Companys default on the Note,
Jeunesse is authorized to exercise all of its rights under the Note and related
agreements, including by foreclosing on the Jeunesse Collateral which was
pledged to secure repayment of the Note.
The Pledgors have received from Jeunesse a proposal that they agree to a strict
foreclosure of the Jeunesse Collateral. In essence, this means that the Jeunesse
Collateral would be transferred to Jeunesse (or its designee) voluntarily, and all
obligations under the Note and any related loan or security documents would be
deemed paid and satisfied in full. A strict foreclosure is authorized by the loan
and security documents related to the Note. A strict foreclosure is also permitted
under Utah Code Ann. 70A-9a-620 and Delaware Stat. 6-9-620. Under a
strict foreclosure, the Company and its Board of Directors must consent to
Jeunesses acceptance of the Jeunesse Collateral in full and complete payment
and satisfaction of all obligations owing under the Note and related agreements.
(May 6, 2015 Notice, Ex. 1 to Storjohann Decl., Ex. A hereto.)
15.

The May 6, 2015 Notice further noted that the strict foreclosure would result in

the transfer of substantially all of Mona Vies assets to Jeunesse:

If such consent is given, then, following the consummation of the strict
foreclosure, the Jeunesse Collateral, which constitutes substantially all of the
assets of the Company and its subsidiaries, would be transferred to Jeunesse or
its nominee, and virtually no assets would remain in the Company or its
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subsidiaries. Rather, the Company and its subsidiaries would only retain
various liabilities (and have no assets with which to pay such
liabilities). Furthermore, as a shareholder of the Company, your shares will also
effectively become worthless.
(Id. (emphasis added).)
16.

Further, according to the May 6, 2015 Notice, Mona Vie advised its shareholders

that as a result of the proposed strict foreclosure, all outstanding Mona Vie shares will also
effectively become worthless. (Id.; see also Storjohann Decl. at 4.)
17.

Mona Vie then disclosed in the May 6, 2015 Notice that it had decided to consent

to the strict foreclosure:

After duly considering the strict foreclosure proposal from Jeunesse, and after
carefully weighing and balancing the duties the Company and its Board of
Directors owes to both its shareholders and its creditors, the Company and its
Board of Directors have elected to consent to it. To arrive at this decision has
not been an easy task the Board of Directors and the Company exhausted all
feasible alternatives for relief. This included efforts to restructure or refinance the
Note, or to sell the assets of the Company and its subsidiaries. . . . We feel that
this is in the best interest of the Company, its employees, and distributors and will
most efficiently lead the Company into a new era of growth with Jeunesse.
(May 6, 2015 Notice, Ex. 1 to Storjohann Decl., Ex. A hereto (emphasis added).)
18.

Further, Mona Vie curiously offered some shareholders the opportunity to redeem

their shares:
A number of shareholders have approached the Company about redeeming their
shares for a nominal amount due to the burden created by the ownership of the
shares and the expense required to file tax returns. If this is something you are
interested in, please contact the Company to request the forms to do this. The
Company anticipates that K-1s for 2014 will be distributed to shareholders in
August of this year and K-1s for a 2015 stub year will be distributed next year as
well.
(Id.)

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19.

Finally, Mona Vie disclosed that Mona Vie and Jeunesse intend to consummate

the strict foreclosure within a few of days of May 6, 2015: A further notice to shareholders will
be given once the transfer of Jeunesse Collateral has been completed which we anticipate will
occur in the next few days. (Id. (emphasis added).)
20.

BTC has received no information concerning the information Mona Vie

considered in its interest in consenting to the strict foreclosure or the proposal by Jeunesse.
21.

As trustee of the MV ESOP, BTC has an interest in the collateral that may be the

subject of the strict foreclosure.

22.

If the strict foreclosure is permitted to proceed, BTC will not have been given an

opportunity to evaluate Monva Vie and Jeunesses proposal.

23.

On May 7, 2015, BTCs counsel sent an objection to Mona Vie consenting to the

strict foreclosure and/or to the strict foreclosure itself. (See Email from S. Morrisson to G.
Jackson, dated May 7, 2015, attached hereto as Exhibit B.) Further, in the email BTCs
counsel asked Mona Vie to send the email to Jeunesse or for Mona Vie to provide contact
information for direct delivery by BTCs counsel. The email advised Mona Vie that BTC was
considering filing a motion for temporary restraining order in the federal court to allow BTC the
opportunity to evaluate this transaction. (Id.)
ARGUMENT
In the Tenth Circuit, a party seeking a preliminary injunction or temporary restraining
order must demonstrate four factors: (1) a likelihood of success on the merits; (2) a likelihood
that the movant will suffer irreparable harm in the absence of preliminary relief; (3) that the
balance of equities tips in the movants favor; and (4) that the injunction is in the public interest.

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RoDa Drilling Co. v. Siegal, 552 F.3d 1203, 1208 (10th Cir. 2009) (citing Winter v. Nat. Res.
Def. Council, Inc., 55 U.S. 7 (2008)); see also Gen. Motors Corp. v. Urban Gorilla, LLC, 500
F.3d 1222, 1226 (10th Cir. 2007) (citing Greater Yellowstone Coal. v. Flowers, 321 F.3d 1250,
1255 (10th Cir. 2003)). Preliminary injunctive relief is a matter dedicated to the district courts
sound discretion. See RoDa Drilling, 552 F.3d at 1208.
A preliminary injunction serves to preserve the status quo pending a final determination
of the case on the merits. Keirnan v. Utah Transit Auth., 339 F.3d 1217, 1220 (10th Cir. 2003)
(citing Tri-State Generation & Transmission Assn, Inc. v. Shoshone River Power, Inc., 805 F.2d
351, 355 (10th Cir. 1986)); see also Univ. of Tex. v. Camenisch, 451 U.S. 390, 295 (1981)
(providing that issuance of a TRO and preliminary injunction serves to preserve the relative
positions of the parties until a trial on the merits can be held.) As demonstrated below, under
both four-part tests outlined above, BTC is entitled to a temporary restraining order and a
preliminary injunction.
A.

BTC and the MV ESOP Will Suffer Irreparable Harm Unless an Injunction
is Issued.

A plaintiff shows irreparable harm by demonstrating a significant risk that he or she

will experience harm that cannot be compensated after the fact by money damages. RoDa
Drilling Co., 552 F.3d at 1210 (quoting Greater Yellowstone Coal., 321 F.3d at 1258); accord
Dominion Video Satellite, Inc. v. EchoStar Satellite Corp., 269 F.3d 1149, 1156 (10th Cir. 2001)
(A plaintiff suffers irreparable injury when the court would be unable to grant an effective
monetary remedy after a full trial because such damages would be inadequate or difficult to
ascertain.)

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A threat to trade or business viability may constitute irreparable harm. Tri-State

Generation & Transmission Assn, Inc. v. Shoshone River Power, Inc., 805 F.2d 351, 356 (10th
Cir. 1986); see also Warren v. City of Athens, Ohio, 411 F.3d 697, 711 (6th Cir. 2005) (stating
that likely go[ing] out of business and financial ruin qualify[y] as irreparable harm); John B.
Hull, Inc. v. Waterbury Petroleum Prods., Inc., 588 F.2d 24, 28-29 (2d Cir. 1978) (determining
that possibility of going out of business could be irreparable harm), cert. denied, 440 U.S. 960
(1979).
In this case, if the strict foreclosure goes forward, Mona Vie will be effectively out of
business. As stated in the May 6, 2015 Notice, substantially all of the assets of Mona Vie and
its subsidiaries would be transferred to Jeunesse or its nominee, and virtually no assets would
remain in the Company or its subsidiaries. (May 6, 2015 Notice, Ex. 1 to Storjohann Decl.,
Ex. A hereto.) In fact, Mona Vie advised BTC that it and its subsidiaries would only retain
various liabilities (and have no assets with which to pay such liabilities). (Id.) Mona Vie would
be nothing more than a shell. As a result, the MV ESOP is in imminent danger of having its
shares in Mona Vie its only asset become valueless. Mona Vie itself declared in the May 6,
2015 Notice that as a shareholder of Mona Vie, [the MV ESOPs] shares will also effectively
become worthless. (Id. (emphasis added).) It may be that Mona Vies proposed action is
appropriate, but at this point BTC does not know. Mona Vie has declared that it intends to
complete the strict foreclosure in the next few days, making the irreparable harm imminent.
(Id.)
Even if damages could be assessed against Mona Vie for consenting to the strict
foreclosure, BTC and the MV ESOP could not be made whole with money damages. Without

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any assets, damages would be impossible to collect from Mona Vie. Accordingly, the proposed
strict foreclosure would imminently and irreparably harm BTC and the MV ESOP.
B.

The Balance of the Equities Overwhelmingly Favors BTC and Issuing the
Requested Restraining Order and Preliminary Injunction.

The threatened irreparable injury to BTC and MV ESOP if an injunction does not issue
substantially and lopsidedly outweighs any conceivable damage to Mona Vie or Jeunesse by
issuance of an injunction. If the injunction is entered, Mona Vie and Jeunesse will not be able
move forward with the expedited strict foreclosure procedure, thereby preserving the status quo.
Assuming Jeunesse has the right to foreclose, the injunction would at most delay the foreclosure.
Mona Vie and Jeunesse will merely have to maintain the status quo.
C.

The Requested Injunction Is in the Public Interest.

In this case, the issuance of a TRO and preliminary injunction would not be adverse to
the public interest. On the contrary, the public interest is served by preventing the use of an
expedited strict foreclosure procedure that would result in Jeunesse being able to effectively raid
Mona Vie with the Boards consent at the shareholders expense.
Included in this analysis is whether the granting of a preliminary injunction will cause
harm to others. Valdez v. Applegate, 616 F.2d 570 (10th Cir. 1980); see also Kentucky v. U.S.
ex. rel. Hagel, 759 F.3d 588 (6th Cir. 2014). On the contrary, an injunction will preserve the
status quo, ensuring that Mona Vie retains its assets for third parties, including other
shareholders and creditors. Simply, any public interest weighs in favor of BTC and the MV
ESOP.
D.

BTC is Likely to Prevail on Its Claims.

If plaintiffs have made a strong showing on the [other] three factors, the showing on
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the merits of their claim could be relaxed. Davis v. Mineta, 302 F.3d 1104, 1116-17 (10th Cir.
2002); see also Bauchman by and Through Bauchman v. West High School, 900 F. Supp. 248,
250 (D. Utah 1995) ([T]he Tenth Circuit has indicated that a more lenient fair grounds for
litigation standard should be substituted for the prerequisite of a substantial likelihood that a
moving party will prevail on the merits when other three elements are satisfied (quoting
Resolution Trust Corp. v. Cruce, 972 F.2d 1195, 1199 (10th Cir. 1992)).
In such cases, the standard for likelihood of success on the merits is a low threshold: The
movant needs to show only that questions going to the merits are so serious, substantial,
difficult, and doubtful as to make the issue ripe for litigation and deserving of more deliberate
investigation. Okla. ex rel. OK Tax Comm'n v. Intl Registration Plan, Inc., 455 F.3d 1107, 1113
(10th Cir. 2006) (citations and quotations omitted); see also Dominion Video Satellite, 269 F.3d at

1157 (emphasis added) (quoting Fed. Lands Legal Consortium v. United States, 195 F.3d 1190,
1195 (10th Cir.1999)). Serious questions need not promise a certainty of success, nor even
present a probability of success, but must involve a fair chance of success on the merits.
Gilder v. PGA Tour, Inc., 936 F.2d 417, 422 (9th Cir. 1991) (internal quotations omitted)
(emphasis added). [I]t is enough that the plaintiff's chances are better than negligible. Sofinet
v. INS, 188 F.3d 703, 707 (7th Cir. 1999).
Here, because BTC has met the first three requirements for injunctive relief, its burden
with respect to likelihood of success on the merits is significantly reduced. BTC easily meets
this burden.

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1.

There Are Questions Deserving More Deliberate Investigation Justifying

Issuance of an Injunction.

BTC was surprised by Mona Vies unilateral May 6, 2015 Notice. Other than what was
stated in that notice, BTC is not informed as to the ramifications of the proposed strict
foreclosure on Mona Vie, the Mona Vie shares, and Mona Vies shareholders, including the MV
ESOP, and the analysis that went into whether the strict foreclosure process should be followed.
An injunction should issue to prevent Mona Vie from proceeding with the unexpected strict
foreclosure, which could result in drastic, irreparable losses to Mona Vies shareholders,
including the MV ESOP, and (indirectly) the MV ESOP participants. An injunction should be in
place until discovery can be conducted to investigate this matter and determine whether the strict
foreclosure procedure should be followed.
2.

BTC is Likely to Prevail on a Claim of Breach of Fiduciary Duty Against

Mona Vie and its Board.

BTC is likely to prevail on a breach of fiduciary duty claim 2 against Mona Vie and its
Board. At the very least, it has a fair chance of success on the merits of such a claim. It is wellsettled in Utah that [d]irectors and officers of a corporation owe a fiduciary duty to their
corporation and to the shareholders. Pond v. Equitable Life & Cas. Ins. Co., 872 P.2d 1070,
1072 (Utah Ct. App. 1994). Here, if the Board consents to the strict foreclosure and transfers to
Jeunesse virtually all of Mona Vies assets, then it will leave Mona Vie a shell, and the
shareholders shares will be worthless. (May 6, 2015 Notice, Ex. 1 to Storjohann Decl., Ex.
A hereto.) Such could breach the Boards fiduciary duty to the shareholders. At the very least,
2

BTC has not yet asserted such a claim. However, a breach of fiduciary claim could be appropriate under these
circumstances. As such a claim is technically a derivative claim, an injunction is appropriate to allow BTC the
opportunity to make a demand on Mona Vie to address this issue before BTC brings a derivative action for breach of
fiduciary duty.

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there are questions on this issue so serious that they merit more deliberate investigation. Okla.
ex rel. OK Tax Comm'n, 455 F.3d at 1113. A preliminary injunction is appropriate to preserve the
status quo in the interim. See id.

Further, Mona Vie has offered to redeem only the shares of some of the shareholders, but
not others. (See May 6, 2015 Notice, Ex. 1 to Storjohann Decl., Ex. A hereto.) Such
disparate treatment of shareholders could also constitute a breach of fiduciary duty. Because
BTC has not seen the redemption proposal, it is unable to assess whether the offered terms of
redemption are fair or how Mona Vie will determine which shares it will redeem. Until these
issues are resolved, the strict foreclosure procedure should be enjoined.
3.

BTC is Likely to Prevail on a Claim that Mona Vie Proceeded with the
Strict Foreclosure Despite BTCs Objection.

On May 7, 2015, BTCs counsel objected to the strict foreclosure and to Mona Vie
consenting to the strict foreclosure under Utah Code Section 70A-9a-101 et seq. because, among
other things, the value of shares held by the MV ESOP will be rendered valueless if the strict
foreclosure goes forward. A secured party should not proceed with a proposed strict foreclosure
if it receives a notification of objection. See UTAH CODE 70A-9a-620(1). Under Utah Code
section 70A-9a-625(1), a court may order or restrain collection, enforcement, or disposition of
collateral on appropriate terms and conditions if a debtor is not proceeding in accordance with
the Uniform Commercial Code. Thus, injunctive relief is appropriate to enjoin strict foreclosure
if Mona Vie attempts to proceed with the strict foreclosure over BTCs objection.

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CONCLUSION
For the reasons set forth above, BTC respectfully requests the Court grant its Motion for
a Temporary Restraining Order and a Preliminary Injunction and enter the proposed Temporary
Restraining Order attached hereto as Exhibit D.
DATED this 7th day of May, 2015.

By /s/ Ryan B. Frazier

Ralph R. Mabey
R. Willis Orton
Ryan B. Frazier
KIRTON McCONKIE
Kirton McConkie Building
50 East South Temple, Suite 400
Salt Lake City, Utah 84111
Scott S. Morrisson
Jeffrey C. McDermott
KRIEG DeVAULT LLP
12800 North Meridian Street, Suite 300
Carmel, Indiana 46032
Jude Anne Carluccio
KRIEG DEVAULT LLP
60 South 6th Street, Suite 2310
Minneapolis, Minnesota 55402
Attorneys for Defendant and Third Party Plaintiff
Bankers Trust Company
of South Dakota

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Case 2:14-cv-00916-BSJ Document 81 Filed 05/07/15 Page 19 of 19

CERTIFICATE OF SERVICE
I hereby certify that on the 7th day of May, 2015, a copy of the foregoing was filed
electronically. Notice of this filing will be sent to all parties by operation of the Courts
electronic filing system. Parties may access this filing through the Courts ECF system.
Gregory Y. Porter
gporter@baileyglasser.com

W. Walden Lloyd
wwlloyd@cnmlaw.com

James L. Kauffman
jkauffman@baileyglasser.com

Martin R. Denney
mrdenney@cnmlaw.com

James E. Magleby
magleby@mgpclaw.com

Evan A. Schmutz
eschmutz@djplaw.com

Jennifer Fraser Parrish

parrish@mgpclaw.com

Andy V. Wright
awright@djplaw.com

In addition, the following parties, which have not yet made an appearance, have been
notified by email:
Graden Jackson
gjackson@strongandhanni.com
Counsel for Mona Vie, Inc.

Michael Johnson
mjohnson@rqn.com
Counsel for Mona Vie, Inc.

/s/ Lisa Sledge

4830-0994-0259.v1

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