Why Offshore Trusts in Nevis Are Used For Asset ProtectionJuly 28, 2022
Trusts are popular for various reasons to hold assets, and the Nevis International Exempt Trust is indicative of the reason for such popularity as an asset protection device. A settlor looks for a safe and stable jurisdiction to hold assets and to be able to access and control such wealth. Nevis provides such security. As important, settlors consider protection from…
Legal Updates for BanksJune 30, 2022
Recent decisions from courts in Illinois offer guidance in lending transactions and handling of bank accounts. Amos Financial LLC. v. Szydlowski The Illinois Court of Appeals in the First District recently created precedent with implications for lenders dealing with guarantors and assignees. In Amos Financial LLC. v. Szydlowski, 2022 IL App (1st) 210046-U, the court affirmed the lower court’s decision…
The Current State of Cryptocurrency Recovery by CreditorsJanuary 26, 2022
While cryptocurrencies have increasingly become more mainstream, they are still relegated to the edges of financial systems because they are still not widely accepted as legal tender and are limited to private transactions between individuals online. Cryptocurrencies are global, and bad actors that use them to perpetrate fraud may be located in various jurisdictions around the globe. Not all countries…
Clarifying the Use of Pre-Litigation Discovery in Chapter 15 Bankruptcy Cases to Investigate Potential Causes of ActionJanuary 7, 2022
As cross-border restructurings grow, especially in the wake of the global COVID-19 pandemic, global companies filing for insolvency relief in foreign countries may utilize chapter 15 of the Bankruptcy Code to facilitate the protection of assets located in the U.S. In Chapter 15 proceeding, assistance is available upon recognition of the foreign proceeding under Section 1521 (a) (4) of the…
A Physical Presence in Canada is Needed to Enforce Foreign Judgement Against a PartyNovember 22, 2021
The Supreme Court of Canada in H.M.B. Holdings Ltd. v. Antigua and Barbuda, recently considered whether foreign judgment creditors can seize assets in Canada when the party does not have an actual presence in Canada. There, the connection in British Columbia (B.C.) contracted with businesses in B.C. that were to pay a finder’s fee to the judgment debtor. The judgment…
Important Changes to Illinois Law Will Affect Restrictive Covenants in 2022November 18, 2021
On August 13, 2021, Illinois Governor J.B. Pritzker signed into law an amendment to the Illinois Freedom to Work Act, which will impact the enforceability of some non-competition and non-solicitation restrictive covenants in Illinois. Although the new law will not impact all restrictive covenants in Illinois (the amendment excludes from its scope restrictive covenants entered into ancillary to the sale…
The Complexity of Asset Recovery Is Shown By Different Approaches Needed In Common And Civil Law JurisdictionsOctober 27, 2021
This overview is offered to provide a structured analysis of how enforcement measures can be implemented in civil law jurisdictions such as France and common law jurisdictions such as the UK and Germany. Creditors need to adapt their approach given the options provided by local law for recovering a debt and assets. The conditions for application of interim collection measures…
Foreign Discovery Through Letters of Request Are Not An Absolute RightSeptember 5, 2021
The Letter of Request Procedure is the main means of evidence gathering under the Hague Convention. This process begins with a request made to the U.S. court where the action is pending to issue a letter of request seeking the production of specified documents or the taking of testimony from a particular witness. The court transmits the letter of request…
Delaware Bankruptcy Court Confirms Bankruptcy Court Has Authority to Issue Preliminary Injunctions To Freeze AssetsSeptember 2, 2021
In 1998, The U.S. Supreme Court in Grupo Mexicano de Desarrollo S.A. v. Alliance Bond Fund, 527 U.S. 308, held that the District Court had no authority to issue a preliminary injunction preventing petitioners from disposing of assets pending adjudication of the respondents’ contract claim for money damages. Subsequently, courts have interpreted Grupo to carve out exceptions for equitable actions…
Inquiry Notice Applies to A Transferee’s Good Faith Defense to a Trustee’s Fraudulent Avoidance ActionSeptember 2, 2021
On August 30, 2021, the Second Circuit decided in Irving Picard, trustee for the Liquidation of Bernard L. Madoff Investment Securities, LLC v. Citibank N.A., 20-1334, on “appeals of the latest installment in the long-running litigation arising from Bernard Madoff’s Ponzi scheme” whether the District Court properly dismissed actions brought against initial and subsequent transferees, to avoid and recover transfers,…
As SPAC Deal Flow Increases, Expect Litigation to Follow SuitAugust 31, 2021
With the recent rise in popularity of special purpose acquisition companies (“SPACs”), expect an uptick in SPAC related litigation to follow. SPAC’s are referred to as “blank check” companies because they are shell companies formed by a sponsor group to raise funds in an initial public offering (“IPO”) for the purpose of acquiring a yet-to-be-identified privately held target company. After…
Discovering and Recovering Cryptocurrency Assets Is Easier Than Originally SuspectedJuly 1, 2021
It is no secret that the rapid development of cryptocurrencies and sudden surges in their popularity presented challenges to victims trying to recover their losses. Cryptocurrencies are a secure, decentralized and anonymous way to conduct transactions outside the customary banking channel. Criminals flocked to cryptocurrencies as a way to conduct illicit business without revealing their names or locations. But, the FBI’s recovery of Bitcoins paid to Colonial Pipeline in the ransomware attack reveals that cryptocurrencies are not as hard to track as criminals think.
Current Trends to Hide AssetsJanuary 7, 2021
With the economy on troubling grounds, there is a greater desire to protect assets. But, there is a difference between hiding and protecting assets. Hiding assets is a form of protection, but done for illicit purposes to keep away from current creditors.
Consideration for Creditors During Current Economic Upheaval When Confronting Cayman Islands Trusts and Foundation CompaniesDecember 18, 2020
The economic upheaval caused by the pandemic has forced persons to focus on asset preservation. The desire to protect wealth and business assets in a well-run, regulated and safe jurisdiction has led to a marked increase in business for the financial sector in places such as the Cayman islands.
The New Illinois Cannabis Regulation and Tax Act and a Preview of Upcoming LitigationFebruary 26, 2020
As you undoubtedly know by now, on January 1, 2020, Illinois became the 11th state to legalize the possession and use of adult-use cannabis. The new law, the Cannabis Regulation and Tax Act, 410 ILCS 705, et seq., (the “CRTA”) – all 610 pages of it – establishes the framework of one of the most regulated industries today. More than just laws about personal possession and use, the CRTA includes numerous provisions regarding the new business opportunities in Illinois, including retail operations (dispensaries), cultivation/processing facilities, infusing “kitchens,” and product transportation...
Current Treatment of Mareva Injunctions in CanadaJanuary 29, 2020
A Mareva injunction freezes a defendant’s assets to avoid their dissipation and to enable a judgment to be later satisfied.
Developments Offshore In Third Party Disclosures in Wrongdoings (Norwich Pharmacal Relief)January 6, 2020
In the last several years to assist tracing of assets and discovery of perpetrators, courts in English common law countries have shown a willingness to assist victims by ordering third parties to disclose information through discovery about wrongdoings under Norwich Pharmacal relief.
Recent Circuit Court Decisions Extend The Breadth of Section 1782 U.S. Discovery in Foreign ProceedingsOctober 31, 2019
A federal district court may order discovery under 28 U.S.C. Section 1782 “for use in a proceeding in a foreign or international tribunal” upon application by any “interested person”.
BVI Scales Back Stand-Alone InjunctionsJune 12, 2019
In 2009 in Black Swan Investment ISA v. Harvest View Limited BHVC (Com) 2009/399, the court established the principle that a court can act in aid of foreign proceedings where it can be shown that there is property situated in BVI which belongs to the defendant in the foreign proceedings and which may be enforced against in the event the foreign proceedings are successful.
Second Circuit in Madoff Enables Trustee To Recover Under Bankruptcy Code For Fraudulent Transfers Initially Sent Offshore from the U.S.February 28, 2019
On February 25, 2019, the Second Circuit in the Madoff liquidation decided that Sections 548 and 550 of the Bankruptcy Code can be applied extraterritorially to recover fraudulent transfers. There, offshore feeder funds were recipients of investors' fraudulent transfers and contended that U.S. fraudulent transfer law did not apply abroad. Read more here.