Chien-Ju Lo et al. v. Ping Chen et al.

Plaintiffs moved ex parte for a temporary restraining order in June 2026, which the court granted in part. The temporary restraining orders were as follows: (1) The parties shall preserve all Organica OMJ LLC’s (“Organica”) books, records, electronically stored information, bank records, payroll records, POS records, accounting records, tax materials, lease files, landlord communications, broker communications, and other business records; (2) Defendants are restrained from selling, transferring, encumbering, marketing, or agreeing to sell or transfer the Stanford Shopping Center location or any other Organica business asset outside the ordinary course of business; and (3) Defendants are restrained from making any withdrawals, transfers, credit card payments, or disbursements from Organica accounts absent plaintiffs’ written consent or further order of the Court.

The court also issued an order to show cause why a preliminary injunction should not issue: (1) Requiring the immediate preservation of all Organica OMJ LLC’s (“Organica”) books, records, electronically stored information, bank records, payroll records, POS records, accounting records, tax materials, lease files, landlord communications, broker communications, and other business records; (2) Requiring defendants to provide plaintiffs and their designated representatives with complete administrative access to Organica’s bank accounts, payment processing accounts, payroll systems, POS systems, rental portals, accounting platforms, and related business systems, including all credentials, access settings, and transaction histories; (3) Restraining defendants from selling, transferring, encumbering, marketing, or agreeing to sell or transfer the Stanford Shopping Center location or any other Organica business asset outside the ordinary course of business; (4) Restraining defendants from making any withdrawals, transfers, credit card payments, or disbursements from Organica accounts absent Plaintiffs’ written consent or further order of the Court; and (5) Suspending defendants from exercising any managerial control over Organica, including control over company bank accounts and business systems, and vesting such managerial control in: (a) Plaintiff Chien-Ju Lo, or her designated representatives; or (b) a neutral third-party agreed upon by plaintiffs and defendants.

Legal Standard for Preliminary Injunctions

“In deciding whether to issue a preliminary injunction, a court must weigh two ‘interrelated’ factors: (1) the likelihood that the moving party will ultimately prevail on the merits and (2) the relative interim harm to the parties from issuance or nonissuance of the injunction.” (Butt v. State of California (1992) 4 Cal.4th 668, 677-678.) “The trial court’s determination must be guided by a ‘mix’ of the potential-merit and interim-harm factors; the greater the plaintiff’s showing on one, the less must be shown on the other to support an injunction.” (Ibid.) “The granting of a mandatory injunction pending trial is not permitted except in extreme cases where the right thereto is clearly established.” (Teachers Insurance & Annuity Ass’n v. Furlotti (1999) 70 Cal.App.4th 1487, 1493 (Furlotti).)

Discussion

It is undisputed that defendant Ping Ping Chen manages the day-to-day operations at Organica’s three businesses. (Complaint, ¶ 17.) It is also undisputed that plaintiffs and defendants obtained equal 50 percent ownership interests in Organica in 2021 when a third member sold her shares. (Complaint, ¶ 13; Chien-Ju Lo dec., 6/16/26, exh. A.) There is a dispute about the extent of the parties’ current ownership percentages, with plaintiffs alleging they now own more than 50 percent of Organica due to plaintiffs’ extra payments toward rent obligations. (Complaint, ¶ 30.)

Plaintiffs argue defendant Ping Ping Chen has mismanaged Organica’s businesses. They point to various irregularities, including: point of sale machine charges for companies even though Chen told plaintiffs Organica was no longer using those companies; an invoice showing charges to 16 employees when it appeared Organica had only 11 employees; payments to a credit card (ending in -1746) that had not been identified as a business credit card; and failures to pay rent that resulted in threats of eviction (Chien-Ju Lo dec., exh.

M, p. 4) and the decision of one landlord to decide not to renew Organica’s lease once it expires in July 2027 (Chien-Ju Lo dec., exh. DD). Plaintiffs also argue that defendants have failed to provide full access to all of Organica’s financial data. Defendants argue plaintiffs’ contentions are not based on evidence of misconduct and instead merely indicate that Organica’s businesses are not profitable despite Chen’s best efforts.

Probability of Prevailing

Based on the foregoing, the court finds plaintiffs have demonstrated a probability of prevailing on their cause of action for failing to provide access to Organica’s financial records. (Corp. Code, § 17704.10; Perry v. Stuart (2025) 111 Cal.App.5th 472, 496 [a member “may enforce its rights [under Corp. Code, § 17704.10] by bringing an action”].) The evidence supports a finding that defendants have not shared all required financial information with plaintiffs. Although defendants apparently produced some financial information in May 2026, that production was incomplete.

Plaintiffs have also demonstrated at least a slight probability of prevailing on their accounting cause of action. “ ‘An accounting is an equitable proceeding which is proper where there is an unliquidated and unascertained amount owing that cannot be determined without an examination of the debits and credits on the books to determine what is due and owing.’ ” (Green Valley Landowners Assn. v. City of Vallejo (2015) 241 Cal.App.4th 425, 442.) An accounting action requires a fiduciary relationship and some “ ‘underlying misconduct on the part of the defendant.’ ” (Ibid.) The parties here have a fiduciary relationship. And the 9

evidence supports at least a slight probability that plaintiffs can demonstrate misconduct by Chen in her management of Organica. Contrary to defendants’ argument that any sum is easily ascertained, it is apparent even from the limited evidence available that determining the parties’ rights and obligations will require substantial investigation into several accounts (including multiple point of sale companies and multiple payroll companies).

Plaintiffs have not demonstrated a probability of prevailing on their other causes of action. Their suspicions, if accurate, could support liability on the part of defendants. But the evidentiary record is too unsettled for the court to find a probability of prevailing.

Interim Harm

Issuing a limited, prohibitive preliminary injunction similar to the temporary restraining order will not seriously harm either side in this case. Plaintiffs would suffer harm without injunctive relief because delay in gaining access to Organica’s current and historical financial information would prevent them from preparing for this lawsuit while also helping stabilize Organica.

The mandatory injunctive relief plaintiffs request—removing Chen from managerial control and vesting that control in plaintiffs—is not supported by this record. This is not one of the “extreme cases where the right [to injunctive relief] is clearly established.” (Furlotti, supra, 70 Cal.App.4th at p. 1493.) It is also possible that all parties could be harmed by the court granting such relief, given that there is no evidence related to plaintiffs’ ability to manage the day-to-day operations of three businesses. Neither party addressed the section of the order to show cause about vesting managerial control in a neutral third party. The court also notes that plaintiffs’ motion is for a preliminary injunction and not for a receivership. The court takes no position on whether a receivership would be appropriate in this case.

Conclusion

The court GRANTS IN PART plaintiff’s motion for preliminary injunction as follows: (1) the parties shall preserve all Organica OMJ LLC’s (Organica) books, records, electronically stored information, bank records, payroll records, POS records, accounting records, tax materials, lease files, landlord communications, broker communications, and other business records; (2) defendants must allow plaintiffs to inspect and copy Organica’s books, records, electronically stored information, bank records, payroll records, POS records, accounting records, tax materials, lease files, landlord communications, broker communications, and other business records; (3) defendants are restrained from selling, transferring, encumbering, or agreeing to sell or transfer the Stanford Shopping Center location or any other material business asset without the written consent of plaintiffs; and (4) defendants are restrained from making any withdrawals, transfers, credit card payments, or disbursements from Organica accounts in an amount over $20,000 without plaintiffs’ written consent or further order of the Court.

The preliminary injunction will remain in effect until entry of judgment or further order of this court. Plaintiffs shall deposit a bond of $20,000 within 30 days of this order. (Code Civ. Proc., § 529.)

The court will prepare the order.

- oo0oo - 10