Judgment Enforcement

Publication

Sale of CITGO Going Forward With Strict Deadlines for Participating Judgment Creditors

Wilk Auslander is an internationally recognized leader in the area of cross-border and domestic enforcement of large-scale monetary judgments, often in values exceeding the billion-dollar mark. Our clients include distressed debt holders, indenture trustees, and multinational domestic and foreign issuers.

Our prowess in the judgment enforcement space has been recognized not only by those seeking to enforce judgments, but also by sophisticated institutions, including instrumentalities of sovereigns, seeking to fend off significant debt holders.

We have been at the forefront of precedent-setting case law in judgment enforcement. For example, we represented a prevailing judgment creditor in a landmark decision in which the New York Supreme Court, Appellate Division, affirmed an order directing foreign-based judgment debtors to turn over assets regardless of where the assets were located. This case is now one of the most cited decisions in the judgment enforcement area.

Judgment enforcement is a complex process, which very often requires judgment creditors to challenge and disassemble sophisticated tactics and structures used by debtors to conceal or transfer assets. These tactics often involve the concealment of assets via numerous special-purpose vehicles, trusts, and international business corporations in debtor-friendly global jurisdictions with seemingly impenetrable secrecy laws.

Our lawyers are able to untangle the labyrinthine web of concealed assets through our large, close-knit network of investigators and local counsel around the world. We apply innovative strategies to generate effective compromise or judgment satisfaction when pursuing even the most reluctant and recalcitrant judgment debtors and obligors. In doing so, we represent clients at all stages of judgment enforcement, including:

Developing an effective strategy at the outset of our engagement, which we continuously mold to fit evolving conditions
Obtaining registration of out-of-state judgments
Conducting post-judgment discovery, including internationally, in order to locate the judgment debtor and/or the debtor’s assets
Employing the use of effective motion practice, based on established and developing statutes and case law
Aggressively advocating for our clients at the trial and appellate levels in state and federal courts.

We regularly employ a multitude of legal mechanisms during the judgment enforcement process, such as:

Post-judgment discovery: One of the most important aspects of judgment enforcement is asset location. We use numerous post-judgment discovery tools to obtain the information we need to force resolution and satisfaction in the face of determined concealment.
Turnover orders: A turnover order is a court order directing the judgment debtor or another party to turn over assets belonging to the debtor, wherever those assets may be located, domestically or internationally.
Contempt orders: Seeking a contempt order is often necessary with a recalcitrant judgment debtor who disobeys court orders.
Charging liens: A “charging lien” or “charging order” is a device, available in most jurisdictions in the United States, by which a judgment creditor may reach — or charge — a judgment debtor’s distribution interest in a limited liability company of which he is a member, or a limited partnership of which he is a partner.

On behalf of a European-based investment fund, we successfully negotiated a settlement with Argentina in connection with the well-publicized Argentine bond default. We subsequently successfully defended the investment fund, in arbitration, federal court, and the Second Circuit Court of Appeals, against claims by its former attorneys seeking a share of the settlement.
We established the precedent in the New York courts that foreign-based judgment debtors who are subject to personal jurisdiction in New York must turn over assets located anywhere in the world — not just in New York.
We successfully defended a multinational action commenced against a government-owned public utility by holders of distressed debt who sought to take over the company. Latin Lawyer awarded “Deal of the Year” recognition to the litigation.
We represented a global investment corporation in connection with enforcement of a multimillion-dollar judgment against a former principal.
We seized a judgment debtors’ equipment aboard a vessel en route from the United States to Asia in connection with enforcement of a multimillion-dollar judgment against a foreign manufacturing conglomerate.
On behalf of Royal Bank of Canada, successfully dismissed a special proceeding that alleged the bank acted in contempt of court by failing to comply with a restraining notice concerning the judgment debtor’s bank account. The resulting decision, which holds that the service of the restraining notice on RBC’s Manhattan branch was not sufficient to bind RBC’s Toronto branch to freeze the judgment debtor’s accounts or turnover its assets, confirms the viability of the “separate entity rule” in New York.
On behalf of a judgment creditor, we successfully negotiated a complex settlement agreement with judgment debtors, who sought bankruptcy protection as a result of our multifaceted enforcement of a multimillion-dollar judgment entered by a federal court. The agreement included terms providing for the payment of funds owing to the judgment creditor, as well as the dismissal of bankruptcy proceedings, waiver of dischargeability of the debt owed to the judgment creditor, and waiver of the automatic stay, as to the judgment creditor’s claims, in future bankruptcies.
We represented the beneficiaries of a multimillion-dollar trust in enforcing a judgment against the trustee for damages arising from the trustee’s improper investments, self-dealing, and conflicts of interest.
In connection with enforcing a multimillion-dollar judgment, we successfully levied against an individual judgment debtor’s real-estate properties.
On behalf of a major financial institution, in its capacity as an indenture trustee, we coordinated and instituted a global judgment enforcement strategy seeking to satisfy a judgment exceeding one billion dollars. The global enforcement strategy included instituting numerous proceedings in both the U.S. and Asia.