Construction Litigation Roundup: “Collateral Damage?”

October 24, 2023
Daniel Lund III - Lexology

Indemnitors on several surety bonds issued for construction projects for a now-defunct (in Chapter 7 bankruptcy) construction company complained that providing collateral demanded by the surety – in excess of $38,000,000 – would foist an incredible burden on the indemnitors.

On a motion by the plaintiff surety for preliminary injunction, the federal court in Houston deftly assessed the requirements for such relief – relief which is provided as an interim measure before the final “permanent” injunction is tried and ruled upon. The court rightly pointed out that the plaintiff/mover is required to meet four requirements: “‘(1) there is a substantial likelihood that the movant will prevail on the merits; (2) there is a substantial threat that irreparable harm will result if the injunction is not granted; (3) the threatened injury outweighs the threatened harm to the defendant; and (4) the granting of the preliminary injunction will not disserve the public interest.’ Clark v Prichard, 812 F2d 991, 993 (5th Cir 1987).”

Mr. Lund may be contacted at


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