NEW YORK — A breakaway group won a round Tuesday in its legal fight with UNITE HERE over contested assets.

This story first appeared in the April 8, 2009 issue of WWD. Subscribe Today.

Judge George Daniels of the U.S. District Court for the Southern District denied UNITE HERE’s request for an injunction seeking to claim assets from the group, Workers United.

UNITE HERE is the product of a 2004 merger between the former Union of Needletrades, Industrial & Textile Employees, led by Bruce Raynor, and the former Hotel Employees & Restaurant Employees International Union, led by John Wilhelm. Workers United formed last month and is made up largely of disaffiliated UNITE HERE members who sided with Raynor and UNITE when the factions fell into political infighting this year.

Among the disputed holdings are union buildings, including UNITE HERE’s international headquarters at 275 Seventh Avenue in New York, as well as a union-owned bank and insurance company.

Lawyers for Wilhelm and UNITE HERE argued the union should hold the assets to maintain the status quo, something they said Workers United had changed when it was formed in the middle of the litigation. They alleged Workers United had used the assets to lure members away.

“This is not only about money,” said UNITE HERE attorney Herbert Stern. “This is about the use of facilities in this moment. And this is an important moment where both sides are having people choose between them.”

Workers United had argued UNITE HERE brought much of the property at issue into the merger.

Daniels told a courtroom filled with attorneys and retired union members, some of whom wore stickers bearing the new Workers United logo, that he didn’t believe UNITE HERE had a case for an injunction and that it was too early in the litigation to take up questions of asset distribution.

“Injunctive relief is not appropriate for injuries that could later be compensated in money damages,” the judge said.

Edgar Romney, who was elected president of Workers United at its founding convention in Philadelphia last month, said the judge “understood clearly that granting [the injunction] would have put the members of Workers United in an untenable position.”

Pilar Weiss, a spokeswoman for Wilhelm, said Daniels’ assertion that Workers United couldn’t move any assets without court approval gave her side confidence going towards trial. “While we didn’t prevail on the injunction, the judge made it very clear that the assets couldn’t be touched until the case is heard,” she added.