Assignment Orders in Federal Court as a Method For Collecting Out of State Assets

Assignment orders can be a useful method of collecting assets which are located outside of a court’s immediate jurisdiction. In two recent decisions federal courts held that once the court obtains jurisdiction over a defendant, the court has jurisdiction over property of the defendant located out of state.

In UMG Recordings v. BCD Music Group a judgment creditor sought an assignment of the right to receive payments from third parties, some of whom were located out of state,  to aid in the recovery of a $7.2 million judgment. The court in UMG held that “When a court has personal jurisdiction over an individual defendant, it also has jurisdiction over the defendant’s property.”
View the opinion granting the assignment order here.

In Global Money Management v. Steven B. McDonnald, the judgment debtor opposed a motion for assignment of rights concerning property located out of state.  Citing UMG v. BCD, supra, the court found that “Because the Court has personal jurisdiction over Defendant in this matter, the Court has “the power to affect out-of-state property by means of decree, based on personal jurisdiction over the parties, which determines the parties’ personal rights or equities in that property.” Read the full opinion here.

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