On March 16, 2026, Justice d’Auguste of the New York County Commercial Division issued a decision in Namdar Fordham Landing LLC v. Fordham Landing Preferred Sponsor, LLC, 2026 NY Slip Op. 31005(U), holding that a fiduciary’s conflicts of interest, even if permitted by contract, were still relevant to the balance of the equities in deciding an injunction, explaining:
[I]n balancing the equities, the Court is persuaded by plaintiff’s potentially unclean hands. In balancing the equities, the court should consider various factors, including whether plaintiff has unclean hands. This rule applies with full force to assess issues involving corporate governance and shareholder rights issues.
A fiduciary owes a duty of undivided and undiluted loyalty to those whose interests the fiduciary is to protect. At a minimum, there are factual questions as to whether plaintiff has created a disabling conflict of interest by virtue of its beneficial owner’s acquisition of a separate individual interest in the property that presently conflicts with the interest of Fordham. Upon this limited record, it appears that Namdar has engineered a situation in which his companies are both a creditor and partial owner of the Fordham property, and he is continuing a foreclosure of the LLC’s principal asset while simultaneously preventing Fordham from seeking bankruptcy protection.
Namdar’s principal answer is that the Operating Agreement permits such conflicts. Yet this contractual waiver—even if it were deemed effective—is to be construed in a limited fashion. It does not eliminate consideration of plaintiff’s conflict in the balance of equity prong of the preliminary injunction analysis.
(Internal quotations and citations omitted).