International Law

Freezing Assets Offshore

By Rick Rein

With the unfortunate rise in ponzi schemes and frauds on investors such as in the Madoff matter, victims are searching for ways to recover their losses. If assets can be located in English common law jurisdictions, there is a remedy--asset freezing orders.

A freezing order is directed to the defendant personally, whether the assets are in his name or not or owned solely or jointly, and depending on the location of his assets, can operate on a worldwide basis, by prohibiting the defendant from removing his assets and dealing with or diminshing their value, subject to use for living expenses. To get such relief, a claimant a) must have a good arguable case, one more than capable of serious argument,  b)  must be able to show that the defendant has assets in the jurisdiction, c) must present a real risk of asset dissipation if a judgment goes unsatisfied, d) must give a cross-undertaking, and e) must be able to claim it is just and convenient to grant the order.

In the event of non-compliance with the freezing order or associated disclosure, the defendant is at risk of a fine and imprisonment.

Third parties must comply with the freezing order if they have notice. Third parties abroad will be affected if the order is enforceable by courts in that other country or if the court issuing the order has jurisdiction over the third party and is able to prevent acts outside the jurisdiction that violate the order.

Developing the basis for a freezing order and then obtaining one takes understanding and experience. Utilizing counsel knowledgeable on the subject is imperative.

Full post as published by International Asset Recovery Law Blog on January 07, 2009 (boomark / email).