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It is one thing to hold a claim. It is another to obtain a judgment. And as we all know, obtaining a judgment does not assure actual recovery on the claim. Once a plaintiff obtains a judgment, it can pursue execution proceedings to encumber, seize, and liquidate a defendant’s property to satisfy the judgment amount. Often the defendant’s conduct raises concerns that assets that would otherwise be available to satisfy the judgement will be transferred or hidden — often beyond the jurisdiction of a court — to frustrate collection of the judgment. That being said, the well-established general rule is a plaintiff cannot attach or seize the defendant’s assets prior to obtaining a judgment. So, are there exceptions to the general rule against prejudgment attachment that may allow a plaintiff to obtain injunctive relief against a defendant freezing the defendant’s assets prior to the outcome of the litigation? This issue was recently considered by Judge Craig T. Goldblatt of the U.S. Bankruptcy Court for the District of Delaware in Miller v. Mott (In re Team Systems International), Adv. No. 23-5004-CTG (Case No. 22-10066 (CTG)) (Jan. 31, 2023). In that case, after reviewing an unusual factual background replete with issues regarding document “redactions” and other irregularities, the court issued a preliminary injunction freezing the defendants’ assets pending the conclusion of the fraudulent transfer litigation.
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Landmines In Bankruptcy Appellate Practice, Part III
By Michael L. Cook
When courts have made important exceptions in the past year, they have either added a gloss on the Judicial Code, corrected lawyers’ errors, filled in statutory gaps, or clarified the relevant statutory language.
A Strategic Guide for Lenders to Navigate Anticipated Distressed Loan Fallout
By Jay Steinman and Karina Leiter
The steps outlined in this article offer a strategic guide for lenders, empowering them to navigate the complexities of loan workouts and enforcement actions with resilience and foresight.
Third Circuit: Bankruptcy Code Mandates Appointment of Examiner In Chapter 11 Cases
By Francis J. Lawall and Brenden S. Dahrouge
The Third Circuit recently held in 'In re FTX Trading' that the plain text of Section 1104(c)(2) mandates the appointment of an examiner under the specified conditions set forth. As a result, the FTX decision will carry significant implications for large and medium-sized bankruptcy cases.
By Lawrence J. Kotler and Ryan Spengler
The Central District of California court held that a bankruptcy court’s administration of cannabis-related state court claims against a debtor’s estate is not a violation of the Controlled Substances Act.