## Facts

- Green Point Savings Bank, a New York mutual savings bank, adopted a plan to convert into a publicly owned capital stock bank.
- The conversion granted eligible depositors subscription rights to buy shares; depositors subscribed to approximately $835 million of stock.
- New York law required the conversion and offering to be completed within 45 days after the subscription period ended; missing the deadline would void subscriptions and require a new solicitation process.
- The New York Superintendent of Banks reviewed the conversion and required supplemental disclosures and an investigation into fairness.
- On January 23, 1994, the Superintendent issued final approval of the conversion plan with modifications addressing the principal disclosure objections raised by the depositor class.
- Depositors filed a federal securities class action alleging materially deficient or misleading disclosures connected to the conversion and offering.
- As the statutory deadline approached, plaintiffs sought emergency relief to stop the conversion; after a state-court request was denied, the federal district court issued an order labeled a TRO barring consummation through February 3, 1994, a date beyond the statutory closing deadline.
- Green Point took an emergency interlocutory appeal.

## Issues

1. Whether the district court’s order, labeled a temporary restraining order, was appealable as an injunction under 28 U.S.C. § 1292(a)(1) because of its practical effect and duration.
2. Whether the district court abused its discretion by issuing emergency injunctive relief that prevented timely consummation of a regulator-approved conversion, given the corrected disclosures, the statutory timetable, and the availability of post-closing remedies.

## Decision

- The Second Circuit held the order was appealable because it operated as a preliminary injunction in substance: it was entered on notice and, by extending beyond the statutory deadline, would effectively defeat the transaction.
- The court vacated the injunctive order, concluding the district court abused its discretion in blocking the conversion.
- The court permitted the conversion to proceed on the regulator-approved timetable; the underlying securities claims were left for further litigation.

## Legal Principles

- Appealability turns on the practical effect of an order, not the label “TRO”; an order that functions like a preliminary injunction and has serious, potentially irreversible consequences is appealable under § 1292(a)(1).
- Preliminary injunctive relief requires a persuasive showing of irreparable harm and an equitable balance favoring the movant; courts must account for harms caused by disrupting time-sensitive transactions.
- When a specialized regulatory scheme governs a transaction and the regulator has required corrective disclosures and approved the transaction, courts should be cautious about using emergency injunctions to override that process, particularly where damages or other post-closing remedies remain available.

## Conclusion

The Second Circuit treated the district court’s “TRO” as an appealable preliminary injunction and vacated it because, in light of the Superintendent’s corrective actions and approval and the statutory closing deadline, the injunction improperly threatened to derail the conversion despite the availability of post-closing relief for any securities-law violations.


Romer v. Green Point Sav. Bank, 27 F.3d 12 (2d Cir. 1994)