Posting for

Wednesday, July 22, 1998

by: Michael Berey

mb@theoffice.net

PREJUDGMENT ATTACHMENTS/FOREIGN COURT ORDERS/FEDERAL CODE OF CIVIL PROCEDURE

(Intro by Bert Rush: Received this today from Michael Berey [NYC, NY].

Thought it'd make a good posting--anyone else have experience with this type of attachment?)

I recently had a situation where a federal district court in Puerto Rico issued an order under Federal Rules of Civil Procedure Sec. 64 and Rule 56 of the Puerto Rico Rules of Civil Procedure enjoining a defendant from transfering her cooperative unit in New York City. The purpose was to secure enforcement of a judgment which might be obtained against the defendant. The federal rule looks to state law for the availability of the prejudgment remedy. In this case, after review of PR law obtained on the internet and conversations with our counsel in PR, I took the position that the "attachment" was still effective notwithstanding that the judgment had been obtained absent the district court providing otherwise.

The Second Circuit (NY) Court of Appeals has just approved the use of this form of preliminary injunction in the case Alliance Bond Fund, Inc. v. Groupo Mexicano De Desarrollo, reported at 1998 WL 220954. It held that "the district court may issue an injunction to protect the plaintif's right to recover monetary damages when there is a threat of defendant's insolvency or its dissipation of assets not directly involved in the pending litigation," even if the property lies outside of the state in which the district court sits.

There is apparently a split in the Circuit courts on the use of this remedy. It has, the case indicates, been used in England where it is known as a "Mareva injunction".

I thought you might find this of interest. I assume you can pull the case from Westlaw.