Commercial Law League of America – The Free Press – Volume 6, Summer 2010
By David J. Cook
This article will survey common asset protection schemes prosecuted by a judgment debtor who face a substantial judgment and decline payment. In the face of post judgment remedies, the judgment debtor will transform assets by retitling the assets in the name of a surrogate entity but retain beneficial use. Asset protection strategies increase the expense of enforcement and drive away most creditors who decline to invest capital in unwinding complex or difficult transfers and abandon enforcement altogether. “Creditors have great difficulty in obtaining control over these assets because often times it is cost prohibitive for the creditor to domesticate the U.S. Judgment in the foreign jurisdiction. As a result, these creditors will often settle their claims for just a few pennies on the dollar.” 1 Asset protection diminishes the value of the judgment, and absent the most stout hearted and well heeled, most creditors would settle for a pittance than finance and face the rigors of year of post judgment fraudulent conveyance litigation.
This article is written in two parts: First what are basic asset protection strategies how to find assets, and second, how to unwind the transfers and achieve recompense.