On July 21, 2025, Justice Chan of the New York County Commercial Division issued a decision in Quinn Emanuel Urquhart & Sullivan, LLP v. Desktop Metal, Inc., 2025 NY Slip Op. 32953(U), granting an injunction is support of an arbitration, holding, regarding the justification for the attachment, that any arbitration award might be rendered ineffectual without the attachment, explaining:
Attachment is a harsh remedy and is construed narrowly in favor of the party against whom the remedy is invoked. A plaintiff or petitioner seeking an order of attachment must show [1] the probability of its success on the merits of its cause of action, [2] that one or more grounds provided for in CPLR 6201 exist, and [3] that the amount demanded from the defendant exceeds all counterclaims known to the plaintiff and [4] demonstrate an identifiable risk that the defendant will not be able to satisfy the judgment. In lieu of grounds under CPLR 6201, CPLR 7502(c) permits courts to issue an order of attachment in connection with an arbitration proceeding upon the ground that the award to which the applicant may be entitled may be rendered ineffectual without such provisional relief. This effectively combines the statutory element and VisionChina’s identifiable risk element.
. . .
Turning to the next ground for attachment-whether the arbitration award will be ineffectual-is the most important element in this proceeding. To establish this element, a petitioner must show the possibility, if not the likelihood, that absent the attachment being requested, the ultimate arbitration award would be severely compromised. Petitioners can make this showing with evidence that respondent would be financially unable to pay the arbitration award or would undertake deceptive actions to avoid paying it. Courts may look at factors such as whether respondent’s assets are dwindling or are being encumbered or moved about, regardless of respondent’s motives; the respondent’s history of paying creditors, a stated or indicated intention to dispose of assets that could be used to satisfy a future judgment, and the respondent’s potential for insolvency and any asset transfers already completed. Here, although it recognized that it was a close call as to whether Desktop is solvent, the Delaware Decision seemed to come down on the side of not insolvent. But as described above, the Delaware Decision made several findings of fact relevant to some of the above factors that show Desktop was recently in a precarious financial state.
. . . [T]here is enough to conclude that Desktop is close enough to insolvency to establish the possibility, if not the likelihood that the ultimate arbitration award may be ineffectual.
Finally, Desktop has not established in opposition that any potential counterclaims will exceed the amount demanded by Quinn.
(Internal quotations and citations omitted).