Main Street Baseball, LLC v. Binghamton Mets Baseball Club, Inc.

MEMORANDUM-DECISION and ORDER

I. INTRODUCTION

Plaintiffs Main Street Baseball, LLC (“Main Street Baseball”) and Clark Mink-er (“Minker”) bring this action against defendants Binghamton Mets Baseball Club, Inc. (“Binghamton Mets Baseball Club”) and Beacon Sports Capital Partners, LLC (“Beacon Sports”) asserting a claim for breach of contract seeking specific performance (Count I) and injunctive relief (Count II).

Main Street Baseball and Minker filed their complaint on March 30, 2015. They filed an amended complaint and motion for a temporary restraining order and preliminary injunction, by order to show cause, pursuant to Federal Rule of Civil Procedure 65 (“Rule —”) on April 2, 2015. Plaintiffs seek to enjoin defendants from discussing, negotiating, or agreeing with any other party concerning the sale of the Binghamton Mets Club, Inc. (“BMets”) baseball team. Defendants opposed and plaintiffs replied.

A temporary restraining order was issued by the undersigned on April 2, 2015, at 2:00 p.m. in Utica, New York. The order temporarily restrained Binghamton Mets Baseball Club and Beacon Sports, their agents,' servants, employees, and any person acting in concert with them from discussing, negotiating, or agreeing with any other party concerning the sale of the BMets baseball team.

Oral argument on the motion for a preliminary injunction was held on April 15, 2015 in Utica, New York. The parties were advised that decision would be reserved with a written decision to follow. On the same day, it was found that good cause existed to extend the temporary restraining order an additional fourteen days from the initial date of expiration. It was determined that the full time allowable under Rule 65(b)(2), twenty-eight days, was necessary to adequately review the merits of the case and would not have a significant impact on the sale of the BMets baseball team if Binghamton Mets Baseball Club *251and Beacon Sports are eventually allowed to proceed with that course of action. Accordingly, the temporary restraining order was extended until April 30, 2015.

Main Street Baseball and Minker’s motion for a preliminary injunction is currently pending and ripe for consideration.

II. BACKGROUND

Main Street Baseball is a Florida limited liability company. David Heller (“Heller”) is Main Street Baseball’s principal and president. Heller manages and co-owns several minor league teams including the Wilmington Blue Rocks, a Single-A team that plays in Wilmington, Delaware. Minker is an investor and co-owns the Wilmington Blue Rocks with Heller. Heller and Minker sought to upgrade their team in Wilmington from a Single-A to a Double-A team; they aimed to purchase a Double-A team and move it to Wilmington, while selling the Wilmington Blue Rocks to a buyer who would relocate that team.

Binghamton Mets Baseball Club owns the BMets. The BMets play in the twelve-team Eastern League, of Minor League Baseball and are the Double-A affiliate of the New York Mets. Michael Urda (“Urda”) is president of the BMets. Beacon Sports is an investment banking firm for the professional sports industry; they brokered the BMets transaction that is at issue here. Richard Billings (“Billings”) is principal of Beacon Sports.

In May 2014, Heller and Minker began discussions with Billings regarding their desire to purchase the BMets, and signed a confidentiality agreement to obtain relevant information regarding the team. Heller and Minker were introduced to Urda in August 2014, and by December 2014, they had reached an agreement with Urda and Billings regarding the sale of the BMets. As is customary in the industry, a Letter of Intent (“LOI”) was to be drafted by attorneys to memorialize the terms. The LOI was executed on January 5, 2015. The nine-page LOI contained, among other terms, a sixty-day “no shopping” period during which defendants could not negotiate with other buyers. The LOI provided for the negotiation of, and ultimate execution, of an Asset Purchase Agreement (“APA”).

Urda requested Heller and Minker put $100,000 into escrow within two days of executing the LOI.1 While Heller and Minker were prepared to do so, plaintiffs claim it took Billings more than two weeks to finalize the escrow agreement because Urda repeatedly changed who the agent would be. Plaintiffs eventually put the money into escrow on' January 23, 2015. In the meantime, plaintiffs’ attorney drafted the APA.

In early February 2015, Heller and Urda exchanged drafts of the APA at Urda’s suggestion to save on legal fees. On February 14, Urda advised that his attorney would review the APA on February 18. In the meantime, Urda made changes to the APA which plaintiffs accepted. On February. 25, fifty-one days into the sixty-day no shopping period, Urda forwarded his lawyer’s comments. According to plaintiffs, Urda made many new demands but remained ready to execute the APA. Plaintiffs contend defendants’ proposed changes altered the material terms of the LOI, in direct contravention of the LOI. One such change related to the parties’ indemnification obligations, which plaintiffs claim the LOI provided for without reference to a deductible or cap. Defendants con*252tend that a deductible and cap were to be negotiated before the APA was finalized, but that plaintiffs refused to negotiate these terms. On February 28, Urda advised Heller that he would be traveling out-of-state starting March 19 and that he wanted the APA to be finalized before that date.

Between February 28 and March 11, 2015, emails were exchanged between the parties and their attorneys. According to Main Street Baseball and Minker, Bing-hamton Mets Baseball Club and Beacon Sports refused to finalize the APA consistent with the LOI, as required by the LOI. Despite this, Urda never indicated the deal was off. On March 11, defendants’ attorney emailed plaintiffs’ attorney and advised that defendants remain interested in selling but that the sixty-day no shopping period had expired (as of March 5) and they would simultaneously consider other offers. On March 13, defendants’ attorney emailed plaintiffs’ attorney and advised that defendants were ceasing negotiations with plaintiffs. Heller and Minker allege that on March 19, they heard that the BMets had already entered into a LOI with another buyer.

Plaintiffs argue the LOI was a binding contract for the purchase of the team. Binghamton Mets Baseball Club and Beacon Sports contend the LOI is not binding, and expired at the end of the sixty-day period. The LOI states it is intended to pursue the proposed acquisition of the team. While the LOI was executed on January 5, 2015, plaintiffs did not send a first draft of the APA to defendants until February 4.2 Defendants contend they were ready, and willing to execute the February 25 draft which included changes by their attorney. Instead, plaintiffs objected to that draft, would not agree to the proposed changes, including a deductible or cap on indemnification, and failed to provide proposed changes back to defendants.

Pursuant to the LOI, usual customary representations and warranties were still to be negotiated in the APA. Defendants claim these terms included indemnities, while plaintiffs contend the LOI fully provided for all indemnities. In addition to. Heller and Minker’s alleged unwillingness to negotiate defendants’ proposed changes, Heller and Minker themselves made new demands for the APA, such as adding an arbitration provision and the award of prevailing party attorneys’ fees which defendants did not agree to, and which were not a part of the LOI.

Binghamton Mets Baseball Club and Beacon Sports contend that the parties could not agree on these and many other issues, so they advised Main Street Baseball and Minker on March 11, 2015- that the exclusivity period had ended. Also on March 11, Urda spoke with Joseph Mc-Eacharn, president of the Eastern League of Professional Baseball Clubs, Inc. who was aware of the LOI between the parties. Urda advised McEacharn that the exclusivity period with plaintiffs had ended and they were unable to reach an agreement. McEacharn advised that he knew of another interested buyer who would contact Urda shortly. That buyer did so, and defendants executed a LOI with the new potential buyer on March 13.

III. DISCUSSION

By their motion, Main Street Baseball and Minker seek to preliminarily enjoin Binghamton Mets Baseball Club and Beacon Sports from discussing, negotiating, or agreeing with any other party concerning the sale of the BMets baseball team for six months. They contend the parties could take expedited discovery during the next *253six months, followed by a hearing on the merits of plaintiffs’ claims. Defendants urge that the temporary restraining order in place should be vacated and the preliminary injunction denied, but if granted, plaintiffs should be required to post a bond for $8.5 million, the purchase price of the team.

A preliminary injunction is an “extraordinary remedy that should not be granted as a routine matter.” Patton v. Dole, 806 F.2d 24, 28 (2d Cir.1986). “A party seeking a preliminary injunction must demonstrate: (1) ‘a likelihood of success on the merits or ... sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly in the plaintiffs favor’; (2) a likelihood of ‘irreparable injury in the absence of an injunction’; (3) that ‘the balance of hardships tips in the plaintiffs favor’; and (4) that the ‘public interest would not be dis-served’ by the issuance of an injunction.”3 Benihana, Inc. v. Benihana of Tokyo, LLC, 784 F.3d 887, 895 (2d Cir.2015) (quoting Salinger v. Colting, 607 F.3d 68, 79-80 (2d Cir.2010)). Even if a plaintiff has not demonstrated a likelihood of success on the merits, a preliminary injunction may still be granted if the plaintiff shows “a serious question going to the merits to make them a fair ground for trial, with a balance of hardships tipping decidedly in the plaintiffs favor.” Metro. Taxicab Bd. of Trade v. City of New York, 615 F.3d 152, 156 (2d Cir.2010) (internal quotations omitted). This alternative “permits a district court to grant a preliminary injunction in situations where it cannot determine with certainty that the moving party is more likely than not to prevail on the merits of the underlying claims, but where the costs outweigh the benefits of not granting the injunction.” Citigroup Global Mkts., Inc. v. VCG Special Opportunities Master Fund Ltd., 598 F.3d 30, 35 (2d Cir.2010).

“The purpose of issuing a preliminary injunction is to preserve the status quo and prevent irreparable harm until the court has an opportunity to rule on the ... merits.” Candelaria v. Baker, No. 00-CV-912, 2006 WL 618576, at *3 (W.D.N.Y. Mar. 10, 2006) (internal quotations omitted). Preliminary injunctive relief “ ‘should not be granted unless the mov-ant, by a clear showing, carries the burden of persuasion.’ ” Moore v. Consolidated Edison Co. of New York, Inc., 409 F.3d 506, 510 (2d Cir.2005) (quoting Mazurek v. Armstrong, 520 U.S. 968, 972, 117 S.Ct. 1865, 138 L.Ed.2d 162 (1997)). “Where there is an adequate remedy at law, such as an award of money damages, injunctions are unavailable except in extraordinary circumstances.” Id. (citing Morales v. Trans World Airlines, Inc., 504 U.S. 374, 381, 112 S.Ct. 2031, 119 L.Ed.2d 157 (1992)). Finally, “[a] decision to grant or deny a preliminary injunction is committed to the discretion of the district court.” Polymer Tech. Corp. v. Mimran, 37 F.3d 74, 78 (2d Cir.1994).

A. Likelihood of Success or Serious Question as to the Merits

Main Street Baseball and Minker argue they are likely to succeed on the merits of their breach of contract claim, or at a minimum, there is a serious question going to the merits and a balance of hardships tips in their favor. Binghamton Mets Baseball Club and Beacon Sports challenge plaintiffs’ likelihood of success on the merits on two grounds. First, defendants argue the LOI was not a binding contract. Second, defendants argue that even if the *254LOI was binding in some way, they did not breach any contractual obligations.

To establish a breach of contract claim under New York law, a plaintiff must plausibly allege “(1) the existence of a contract between itself and that defendant; (2) performance of the plaintiffs obligations under the contract; (3) breach of the contract by that defendant; and (4) damages to the plaintiff caused by that defendant’s breach.” Diesel Props S.r.l. v. Greystone Bus. Credit II LLC, 631 F.3d 42, 52 (2d Cir.2011). The parties agree as to these familiar elements, but dispute the existence of a binding contract. Accordingly, the breach of contract claim first depends on whether the LOI was a binding contract.

1. The Legally Binding Nature of the LOI

By its plain terms, the LOI contemplates the preparation and execution of additional documentation, namely, an APA. The LOI therefore belongs to a class- of agreements known as “preliminary agreements which ... provide for the execution of more formal agreements.” Adjustrite Sys., Inc. v. GAB Bus. Servs., Inc., 145 F.3d 543, 547 (2d Cir.1998). “[Wjhere the parties contemplate further negotiations and the execution of a formal instrument,” a preliminary agreement ordinarily “does not create a binding contract.” Brown v. Cara, 420 F.3d 148, 153 (2d Cir.2005). “In some circumstances, however, preliminary agreements can create binding obligations.” Id.; see also Shann v. Dunk, 84 F.3d 73, 77 (2d Cir.1996) (“[I]f a preliminary agreement clearly manifests such intention, it can create binding obligations.”). The questions then, are: (1) whether the LOI created binding obligations; and (2) if so, whether those obligations included a commitment by defendants to sell the team to plaintiffs, or merely an obligation to negotiate in good faith. At the preliminary injunction stage, plaintiffs carry the burden to demonstrate that they are likely to succeed on the merits of their breach of contract claim, or that there is a serious question going to the merits and a balance of hardships tips in their favor.

The Second Circuit classifies binding preliminary commitments into one of two categories. Adjustrite, 145 F.3d at 548.4 Agreements within the first catego*255ry are Type I preliminary agreements— “folly binding preliminary agreements], which [are] created when the parties agree on all the points that require negotiation (including whether to be bound) but agree to memorialize their agreement in a more formal document.” Id.; see also Shann, 84 F.3d at 77 (“Type I is where all essential terms have been agreed upon in the preliminary contract, no disputed issues are perceived to remain, and a further contract is envisioned primarily to satisfy formalities.”). Agreements of this type render the parties “fully bound to carry out the terms of the agreement even if the formal instrument is never executed.” Ad-justrite, 145 F.3d at 548.

Agreements within the second category are Type II preliminary agreements — “binding preliminary commitment[s]” that are “binding only to a certain degree” because “the parties agree on certain major terms, but leave other terms open for further negotiation.” Id. (internal quotations omitted); see also Shann, 84 F.3d at 77 (“Type II is where, the parties recognize the existence of open terms, even major ones, but, having agreed on certain important terms, agree to bind themselves to negotiate in good faith to work out the terms remaining open.”). Type II agreements “do[] not commit the parties to their .ultimate contractual objective.” Adjustrite, 145 F.3d at 548 (internal quotations omitted). Rather, they bind the parties “to the obligation to negotiate the open issues in good faith in an attempt to reach the ... objective within the agreed framework.” Id. (internal quotations omitted). If the parties “fail to reach such a final agreement after making a good faith effort to do so, there is no further obligation.” Id.

The LOI bound defendants to sell and plaintiffs to purchase the BMets if it constituted a Type I agreement, but not if it constituted a Type II agreement or was, in the alternative, not binding in any respect. The LOI merely bound the parties to negotiate in good faith if it constituted a Type II agreement. Plaintiffs argue the LOI is a Type I agreement, binding the parties to the sale, or at a minimum, a Type II agreement which defendants breached. Defendants contend the LOI is not a Type I nor Type II agreement, and even if interpreted as a Type II agreement, plaintiffs have not plausibly alleged a breach of contract. The Second Circuit has identified four factors to’analyze when considering whether an agreement is a Type I preliminary agreement, and five factors to analyze when considering whether an agreement is a Type II preliminary agreement.

When considering whether an agreement is a Type I preliminary agreement, the following four factors should be analyzed: (1) “whether there is an ex-' pressed reservation of the right not to be bound in the absence of a writing”; - (2) “whether there has been partial performance of the contract”; (3) “whether all of the terms of the alleged contract have been agreed upon”; and (4) “whether the agreement at issue is the type of contract that is usually committed to writing.” Brown, 420 F.3d at 154. When considering whether an agreement is a Type II preliminary agreement, the following five factors should be analyzed: (1) “whether the intent to be bound is revealed by the language of the agreement”; (2) “the context of the negotiations”; (3) “the existence of open terms”; (4) “partial performance”; and (5) “the necessity of putting *256the agreement in final form, as indicated by the customary form of such transactions.” Id. at 157.

The Second Circuit has noted that not all of the factors from the two sets are relevant or helpful in every context. See Vacold LLC v. Cerami 545 F.3d 114, 124-25 (2d Cir.2008). Further, as some of the factors duplicate or overlap with each other, they can and will be addressed in the same discussion. Id. Finally, when applying these factors, courts must be “mindful of the need to balance two competing policy concerns. On the one hand, courts must avoid trapping parties in surprise contractual obligations that they never intended.” Gas Natural, Inc. v. Iberdrola, S.A., 33 F.Supp.3d 373, 379 (S.D.N.Y.2014) (internal quotations omitted). Simultaneously, “courts must enforce and preserve agreements that were intended to be binding, despite a need for further documentation or further negotiation.” Id. (internal quotations omitted). Finally, the Second Circuit has advised that while “these factors help us identify categories of facts that are often useful in resolving disputes of this sort ... they do not'provide us with a talismanic scorecard. The ultimate issue, as always, ‘is the intent of the parties: whether the parties intended to be bound, and if so, to what extent.’ ” Vacold, 545 F.3d at 125 (quoting Adjustrite, 145 F.3d at 548-49).

a. Language of the Agreement

The first and most important factor is whether the language of the agreement “discloses an intention by the parties to be bound to the ultimate objective.” Brown, 420 F.3d at 154. The relevant inquiry is whether the agreement expressly states that the parties will not be bound in the absence of a further, definitive written instrument. Id. There does not appear to be such a reservation here. The LOI is nine pages long and clearly sets forth the parameters of the transaction. It begins: “[t]his letter outlines the terms of our mutual and fully binding intention (the “Letter of Intent”) to pursue the proposed acquisition of the Bingham-ton Mets baseball club.” Am. Compl., Ex. A, 2, ECF No. 6-1, at 2 (“LOI”) (emphasis added).5 It explicitly states that it “shall constitute a legally binding commitment of the Parties to execute and deliver the Asset Purchase Agreement ... and fulfill such other obligations and satisfy such other conditions related thereto to facilitate Purchaser receiving all necessary Baseball Approvals to close the contemplated transaction herein.” Id. The LOI further notes that after executing the APA, “Seller would sell, convey, transfer, assign, and deliver to Purchaser, and Purchaser would purchase, acquire and assume, in exchange for the Purchase Price set forth in Section 3, all of Seller’s assets, properties and rights.” Id. ¶ 1.

The LOI is “not a proposal, a draft, an expression of desires, or a memorandum of understanding.” Vacold, 545 F.3d at 125 (citing Brown, 420 F.3d at 154 (two-page “memorandum of understanding” held not to be a Type I preliminary agreement); Adjustrite, 145 F.3d at 549 (two-page “proposal” that stated “desires” held non-binding); Winston v. Mediafare Entm’t Corp., 777 F.2d 78, 81 (2d Cir.1985) (“proposed agreement” held nonbinding)). Like the binding agreement in Vacold, the LOI here did not speak in “decidedly noncommittal” language “suggesting, at most, a promise to work together.” Id. (quoting Brown, 420 F.3d at 154). Instead, the LOI “specified, in considerable detail, the performance that it required of each party.” Id. Where, as here, an agreement *257uses language that is committal, and specifies each party’s performance in detail, it is indicative of a Type I agreement. See id.

Moreover, the LOI specified in detail what would become of the deal if the parties were unable to execute an APA by the end of the sixty-day period. Also in support of finding the LOI constitutes a Type I agreement is the LOI’s drafting history, which courts are both permitted and required to consider. Id. at 127 (citing Winston, 111 F.2d at 80-81 (in “determining] whether the parties intended to be bound,” we consider “ ‘correspondence [and] other preliminary or partially complete writings’ ” (quoting Restatement (Second) of Contracts § 27 cmt. c))). According to plaintiffs, the parties negotiated the terms of the sale for fourth months (August to December 2014), and after shaking hands on December 8, 2014, they spent the next two and a half weeks exchanging multiple drafts of the LOI. According to plaintiffs, Urda stressed that he wanted the LOI to be binding, to which Heller and Minker agreed.

At the same time, however, other language in the LOI supports the conclusion that the LOI is at most a Type II agreement. Although “not necessarily controlling,” labels “such as ‘letter of intent’ or ‘commitment letter’ ” may “be helpful indicators of the parties’ intentions.” Teachers Ins. & Annuity Ass’n of Am. v. Tribune Co., 670 F.Supp. 491, 497 (S.D.N.Y.1987). Defendants point to the opening sentence of the LOI, which as described above, states that “[t]his letter outlines the terms of our mutual and fully binding intention ... to pursue the proposed acquisition.” LOI, at 2 (emphasis added). Similarly, in Brown, 420 F.3d at 154, the subject memorandum of understanding purported to “outline the terms under which [the parties] will work together to develop, build, market, and manage a new real estate venture.” Id. (emphasis in original). The Second Circuit found that language to be “decidedly non-committal” and concluded that the agreement was not a Type I agreement. Id.

Further, the assertion that the LOI “shall constitute a legally binding commitment” is prefaced by the phrase “[n]ot-withstanding anything to the contrary contained in this Letter of Intent.” LOI, at 1. The phrase “[notwithstanding” or similar, could suggest it overrides any binding obligations the LOI otherwise purports to impose. See Gas Natural, 33 F.Supp.3d at 379. Moreover, the “legally binding commitment” described above applies “except as set forth in Sections 5, 6, 8, 9, 10, 12 and 13 [of the LOI].” LOI, at 2. Notably, Section 12 clarifies that “the Parties agree to use their reasonable best efforts to negotiate, execute and deliver, prior to the expiration of the No-Shopping Period [Section 9], a mutually agreeable Asset Purchase Agreement....” Id. at 8, § 12. The express language of the LOI sets an end to the parties’ negotiation of the final agreement, the APA. Thus it could be concluded that any obligations to sell and purchase the team terminated at the expiration of the sixty-day no shopping period. Finally, the LOI expressly contemplated the future drafting and execution of the APA, in which “[t]he obligations of the Parties shall be spelled out in greater specificity.” LOI, at 2. These provisions suggest an intent by the parties not to be bound by the “ultimate objective.”

These provisions and the competing interpretations lead to the conclusion that there are, at a minimum, serious questions as to whether the language of the agreement weighs more strongly in favor of plaintiffs or defendants.

b. Partial Performance

The second factor is satisfied either where both parties undertake per*258formance, or where one party begins performance with the knowledge or approval of the other party. See Brown, 420 F.3d at 148. At defendants’ request, plaintiffs made their first payment — the $100,000 First Security Deposit into escrow — toward purchase of the team. While defendants point out that the LOI contemplated at least one, and possibly two additional security deposits, this does not negate plaintiffs’ partial performance. This favor weighs in favor of a finding that the LOI was possibly a Type I agreement, or at a minimum, a Type II agreement.

c. Open Terms

The existence of open terms “is always a factor tending against the conclusion that the parties have reached a binding agreement,” Tribune, 670 F.Supp. at 499, and there is a “ ‘strong presumption against finding binding obligation^]’ ” in an agreement that “ ‘include[s] open terms ... and expressly anticipate^] future preparation and execution of contract documents,’ ” Arcadian Phosphates, Inc. v. Arcadian Corp., 884 F.2d 69, 73 (2d Cir.1989) (quoting Tribune, 670 F.Supp. at 499). “At the same time, the parties’ intent is ultimately controlling: if the parties intended to be bound despite the presence of open terms, courts should not frustrate their achieving that objective or disappoint legitimately bargained contract expectations, provided that the agreement is not so fragmentary as to be incapable of sustaining binding legal obligation.” Vacold, 545 F.3d at 128 (internal quotations and citations omitted). As the Second Circuit further elaborated in Vacold:

If a preliminary agreement contains “no issues outstanding that were perceived by the parties as requiring negotiation, their agreement should be seen as a[] Type I binding obligation,” Shann, 84 F.3d at 82, notwithstanding that the parties may intend to memorialize their understanding in more formal documents, Adjustrite, 145 F.3d at 548. But if, in contrast, the parties enter into a preliminary agreement perceiving that open issues remain to be worked out and intending simply to bind themselves to good-faith efforts at further negotiation, then the preliminary agreement, if an agreement at all, is a type II obligation. Id.

545 F.3d at 128.

It appears the parties fully agreed to all the material terms of the transaction in the lengthy LOI. They agreed to the total purchase price of $8.5 million and the timing of payment of the purchase price including the payment of multiple security deposits. They agreed to maintenance of contracts and business relationships, assignment of the stadium lease, and retention of employees. Plaintiffs contend the parties also agreed to assumption of liabilities, retained obligations and indemnification, and risk of loss, and the only terms that needed to be “fleshed out” in a formal agreement were “representations and warranties customary for a transaction of this nature.” LOI, at 2.

In contrast, Binghamton Mets Baseball Club and Beacon Sports point out that the LOI expressly contemplated further negotiations by the parties and the LOI refutes Main Street Baseball and Minker’s contention that only minor issues remained to be added to the APA. See LOI, at 8 § 12. Section 12 provides: *259Specifically, defendants argue the issue of indemnification was left open, and that while Section 4 provides for indemnification, it does not indicate any cap or deductible.6 Instead, Section 12 provides for the later negotiation of indemnities. Defendants also point out the new terms which plaintiffs themselves attempted to negotiate during the sixty-day period, including a guarantee of no loss during the 2015 season, an arbitration and prevailing party fees provision, and responsibility for the collection of accounts receivable. Defendants argue that these provisions, not in the LOI, establish that plaintiffs also believed there to be open terms left to negotiate following the execution of the LOI.

*258The Parties agree to use their reasonable best efforts. to negotiate, execute and deliver, prior to the expiration of the No-Shopping Period, a mutually agreeable [APA] containing provisions consistent herewith and such other terms and provisions as are normally included in asset purchase agreements .... including, without limitation, usual and customary representations and warranties, disclosures, and indemnities.

*259These provisions and the competing in-. terpretations lead to a finding that there is, at a minimum, a serious question as to the merits of plaintiffs’ claims.

d. Type of Contract to be Committed to Writing

“New York courts have recognized that the ‘complexity and duration of [an] alleged agreement’ is particularly significant in determining whether it must be reduced to formal writing in order to be fully enforceable.” Brown, 420 F.3d at 155. The parties do not dispute that this $8.5 million sale is the type of complex agreement which would ordinarily be committed to a formal contract. However, plaintiff's contend the nine-page LOI is sufficient to constitute the required writing, while defendants argue the APA is the formal writing envisioned by the LOI.

Again, these competing interpretations raise at least serious questions as to the binding nature of the LOI.

e. Context of Negotiations (only a Type II factor)

“An agreement is likely to be a type II preliminary agreement, and not a fully binding type I preliminary agreement, when it is ‘subject to numerous contingencies that ha[ve] the potential to dramatically affect planning, execution, and management’ of the ultimate contractual objective.” Vacold, 545 F.3d at 127 (quoting Brown, 420 F.3d at 158).

This factor likely turns' on whether the terms of indemnification were settled in the LOI as Main Street Baseball and Minker argue, or left open to be negotiated as Binghamton Mets Baseball Club and Beacon Sports assert. If, as plaintiffs suggest, the terms of indemnification were settled in the LOI, this factor would favor the conclusion that the LOI was of the Type I variety — a definite agreement to buy and sell the team, subject to the parties’ ability to merely negotiate representations and warranties customary in this type of transaction, and their ability to execute an APA within sixty-days. The parties foresaw that their transaction had the potential to be affected by a future contingency, namely, the parties’ failure to reach an agreement or execute an APA within sixty-days, and the LOI provided for what would happen in that event. On the other hand, if the LOI left open to negotiate the various terms cited by defendants, including those additional issues raised by plaintiffs during negotiations,' then the LOI was subject to numerous contingencies that had the potential to dramatically affect planning, execution, and management of the transaction.

*260Like all of the above factors, plaintiffs have at least established that there is a serious question going to the merits.

f. Balance of Hardships

It is difficult to determine with certainty at this early juncture whether plaintiffs are likely to succeed on the merits of their breach of contract claim. At a minimum, plaintiffs have demonstrated “a serious question going to the merits to make them a fair ground for trial.” Metro. Taxicab Bd. of Trade, 615 F.3d at 156. To sustain their burden and ascertain a preliminary injunction under this standard, the balance of hardships must also tip decidedly in plaintiffs’ favor. This alternative “permits a district court to grant a preliminary injunction in situations where it cannot determine with certainty that the moving party is more likely than not to prevail on the merits of the underlying claims, but where the costs outweigh the benefits of not granting the injunction.” Citigroup Global Mkts., 598 F.3d at 35.

In balancing the hardships, plaintiffs assert they will be harmed if an injunction is not granted because defendants will sell the team to another buyer and that sale cannot be undone. They contend there will be no harm to defendants if their atte