The Houston [1st] Court of Appeals has reversed and remanded a trial court’s grant of a TRO freezing the transfer of an energy marketing assets pending determination of a breach-of-contract suit.
Axis Energy Marketing, LLC v. Apricus Enterprises, LLC (No. 01-23-00660-CV; August 28, 2025) arose in April 2023 after Axis (Appellant) failed to pay crude oil supplier and transporter Apricus for crude oil it delivered on Axis’s behalf. The March deliveries were made to three locations and totaled $5,668,654.53 in value. However, on the payment deadline, Axis notified Apricus that it lacked the resources to pay as its customer (Delek Trading & Supply, LLC) had been withholding payment for all March deliveries, claiming crude contamination. Delek sued Axis on that basis. Nevertheless, Axis had been paid for the other two deliveries, receiving $2.18 million of the $5.6 million it owed to Apricus. So Apricus sued Axis for breach of contract, suit on sworn account, and quantum meruit. Axis unsuccessfully filed a plea for abatement and moved to transfer venue to Midland County where its suit against Delek was ongoing.
Apricus requested a temporary restraining order and injunction. The trial court granted the temporary injunction, enjoining Axis from transferring or distributing its assets amounting to the $2.18 million it owed Apricus. However, since Axis’s plea in abatement was later granted by the 1st Court of Appeals’ order, and the suit abated pending final adjudication of the Midland lawsuit, Axis claimed the injunction was nullified. Axis further challenged the injunction on appeal, asserting Apricus failed to establish 1) irreparable harm and 2) balance of hardships.
In an opinion by Justice Guiney, the court of appeals reversed and remanded to the trial court for further proceedings. Apricus argued the appeal was mooted by the trial court’s summary judgment on the injunction-related claims. The court disagreed, observing that since this suit’s abatement precluded any final order from being issued, the the appeal was not moot concerning the question of irreparable harm. Here the court found in Axis’s favor, concluding that Apricus did not face “irreparable injury” because there was no “real and substantial likelihood that Axis [was] insolvent.” Instead the court found that while Axis’s withholding of payment for the March deliveries may have constituted a breach of contract, it did not indicate an “insolvency event” meriting injunctive relief. In view of Delek’s refusal to pay Axis, the court declined to construe Axis’s statement that it “d[id] not have the resources to pay Apricus as scheduled” as an admission of insolvency. Furthermore, the court found no witness testimony to substantiate Axis’s alleged “insolvency.” To the contrary, Axis’s partner testified at the time that: Axis “[is] paying its employees as well as supplying its customers,” “does not intend to close its doors” and is “making money.”
Finally, reviewing Axis’s financial records, the court concluded that no evidence supported the trial court’s determination that Axis was insolvent. Unlike in Texas Black Iron, Inc. (TBI) v. Arawak Energy International Ltd.. 527 S.W.3d 579 (Tex. App.—Houston [14th Dist.] 2017, no pet.), where injunctive relief was granted because of TBI president’s admissions that business was “as bad as he could remember,” preventing him from paying Arawak, Axis’s partner testified that Axis was not insolvent, had no debt, and had paid all other creditors in full and on time. Since no evidence suggested that Axis was insolvent and posed a risk of irreparable harm to Apricus, the court concluded the trial court abused its discretion in granting Apricus’s injunction. Thus, the Court reversed the temporary injunction and remanded to the trial court for further proceedings.
TCJL Intern Shaan Rao Singh researched and prepared this article.
