He barred any further exchange of documents to consummate the foreclosure that the MonaVie board of directors agreed to last week at the request of the Florida company that, like MonaVie, sells products to a network of independent distributors through multilevel marketing.
Court records show MonaVie entered into a loan of $182 million in November 2010 with a company called TSG-MV Financing LLC, carrying an annual interest rate of 12 percent and with almost all MonaVie's assets pledged as collateral.
The loan was to have been paid in full by June 30, 2014, but MonaVie apparently defaulted and TSG-MV sold the note in March to Legacy Alliance Partners LLC of Altamonte Springs, Fla., which has the same principal officers as Jeunesse Global LLC, the multilevel marketer that announced in March that it had purchased MonaVie.
On Wednesday, MonaVie Chairman and CEO Mauricio Bellora wrote to shareholders that MonaVie was in default and had agreed to a "strict foreclosure," which would turn over almost all assets to Legacy Alliance Partners and erase all shareholder value.
But Bankers Trust, which is the trustee overseeing MonaVie's employee stock ownership program, asked Jenkins to temporarily halt the foreclosure until it has an opportunity to view documents related to the deal. The ESOP is now a major shareholder in the company but the foreclosure would make it worthless, said Ryan Frazier, an attorney for Bankers Trust, which also is named as a defendant in a lawsuit over alleged irregularities in the stock program.
"All the values of the shares will be worth essentially nothing," he said, "and essentially the ESOP will become nothing."
Jenkins peppered the lawyers with questions about the companies involved and who owned and operated them.
"I'm interested in transactions as transactions," he said, "to make sure we're talking about arm's length transactions."
The temporary restraining order will be in place until 5 p.m. May 29, with a hearing set for that afternoon.