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Final Copy 289 Ga. 1

S10A2078. SRB INVESTMENT SERVICES, LLLP et al. v. BRANCH BANKING AND TRUST COMPANY et al.

NAHMIAS, Justice. The appellants challenge an interlocutory injunction entered to preserve the status quo pending adjudication of the merits of appellee Branch Bank and Trust Company's ("BB&T") breach of contract and fraudulent transfer claims. We conclude that the trial court did not abuse its discretion in entering the interlocutory injunction, and so we affirm. 1. This case involves 16 loans that BB&T and its predecessors made between

2005 and 2007 to two companies, which were guaranteed by two other companies.1 All four of those companies were controlled by father and son residential housing developers Stephen R. Been and Stephen S. Been. The loans were due to mature between March and May 2009. In mid-2007, the liquid assets securing the loans were transferred to two other companies controlled by the Beens, SRB Investment Services, LLLP ("SRB") and SFB Investment, LP ("SFB"). BB&T required SRB, SFB, and The borrowers were Tampa Investment Group, Inc. and Legacy Investment Group, LLC, and the guarantors were Tampa Financial Company, Inc. and Legacy Communities, LLC. Although they are defendants in the trial court, these companies are not named in the interlocutory injunction and have not appealed.
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another company controlled by the Beens to sign as additional guarantors for the loans.2 As part of the restructuring, SRB, SFB, and the three other guarantors signed liquidity covenants requiring them to maintain an aggregate of $35 million in cash and cash equivalents. In mid-2008, as the U. S. housing market was suffering a historic collapse, the Beens authorized enormous "partnership distributions" from SRB and SFB. SRB and SFB's third and fourth quarter 2008 financial statements show that from June 30 to December 31, 2008, their collective assets shrank by $191 million or nearly 90%, from $216 million to $25 million. This left the guarantors in violation of the liquidity covenants, given the very limited assets of the other three guarantors. However, SRB and SFB withheld those financial statements from BB&T until January 7, 2009. By January 16, 2009, BB&T prepared a renewal package for the 16 loans that were scheduled to mature over the next few months, which would have required an immediate infusion of cash to increase the balances of SRB and SFB to the required $35 million in liquidity, but the Beens refused. Negotiations between BB&T and the Beens continued over the next few months, as the financial situation of the Beens and their companies continued to worsen. On

The third company required to sign as an additional guarantor was Legacy Communities Group, Inc. This company also was not named in the interlocutory injunction and is not a party in this appeal.
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January 23, 2009, another lender filed suit to recover $22 million from the Beens, SRB and SFB, the borrowers and other guarantors on the 16 BB&T loans, two limited liability companies created by the Beens (SRB Management Company, LLC and SFB Investment Management, LLC), and three related entities. Despite the entry of a temporary restraining order, the defendants in that action continued to transfer away assets. On February 2, 2009, BB&T sent notices of default to SRB and SFB and the borrowers and other guarantors on the BB&T loans due to the violation of the liquidity covenants, although later that month BB&T briefly extended the maturity dates on ten of the sixteen loans. On February 19, 2009, a third lender, Bank of America, accelerated all of its loans to SRB, SFB, one of the two borrowers on the BB&T loans, the other three guarantors, and eleven affiliated entities; Bank of America later filed suit against them for $4.3 million. In addition, in May 2009, Stephen F. Been settled his divorce for $35 million. On June 22, 2009, BB&T filed suit against SRB and SFB, the Beens, the original borrowers and guarantors on the 16 loans, the other additional guarantor added in 2007, and the two limited liability companies controlled by the Beens that were named in the other lender's lawsuit. BB&T sought to recover more than $19 million in principal and interest then outstanding on the loans. In addition to breach of contract, BB&T raised claims under the Uniform Fraudulent Transfers Act, OCGA

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