Court OKs Temporary Restraining Order In Ripple Labs Investor Fight
Delaware’s Chancery Court issued a temporary restraining order on Friday limiting Ripple Labs Inc. from carrying out XRP cryptocurrency transaction and equity redemption until Tetragon can sell back its stock.
Tetragon Financial Group Ltd, an investor in Ripple Labs filed a temporary restraining order on Jan, 7th. In the motion, Tetragon was seeking a court order that would prevent Ripple from using legally available cash or other liquid assets for any purpose other than to redeem the Tetragon’s Series C preferred stock paid in full.
The vice-chancellor, Morgan T. Zurn said during the arguments, that she views Tetragon’s requests for a complete ban on XRP purchases as potentially “heavy-handed.” Instead, the court ordered Ripple to maintain a “net-zero” position in sales and purchases of XRP, rather than halting acquisitions outright.
Why lawsuit from Tetragon Financial Group:
“Seeking for quick redemption before the plug is pulled out of the bathtub and value starts to go down the drain”.
Recently, the U.S. Securities and Exchange Commission brought its case against Ripple charging Ripple and two executives for sales of $1.39 billion in XRP cryptocurrency since 2013, transactions that regulators viewed as sales of unregistered securities. Ripple has contested the SEC’s conclusions.
Fearing that the stock could depreciate, the London-based investment firm – Tetragon is seeking to enforce its contractual right to redeem its preferred stock.
The Tetragon suit followed what the company said were weeks of Ripple refusals to act on Tetragon’s contract rights to immediate, first priority redemption of its holdings. Tetragon holds $175 million of Series C shares issued last year by Ripple i.e. less than 2% of Ripple’s equity.
