Andre Law Firm P.A. wishes you and yours a healthy and prosperous 2022. This particular post is directed at my colleagues who may have acquired judgments or verdicts for their clients this year and have not yet been paid on them.
Threshold Question:
Have you perfected your judgment liens? In a previous post I discussed the importance and practical value of perfecting your client’s judgment lien in order to preserve lien priority as to the judgment debtor’s personal and real property. As a brief recap, to perfect a judgment lien in real property, one must record a certified copy of the final judgment or verdict in the County where the Debtor has real property. To perfect a lien in personal property one must file a judgment lien certificate with the Florida Department of State Division of Corporations.
Even if your practice does not have the desire or bandwidth to engage in active collection of a judgment, these steps are crucial in preserving lien priority. With the current economic times we are in, often judgment debtors have several creditors and preserving lien priority is crucial. In addition, aggressively pursuing collection on the judgment sets you apart from passive creditors and gets your client paid.
Review Your Files:
I urge my legal colleagues to review their files and make sure that the judgments you have worked so hard at acquiring for your clients are properly perfected. For 2022, I further urge you to review your files to see what can be done to get these unpaid judgments collected. My firm would love to help you do this. If you require a review on the potential collectability or assessment of your unpaid judgments, contact us.
I will tell you first and foremost I have mixed feelings about depositions in aid of execution. I have found in my years of taking these depositions that all but the most honest and scrupulous people will have zero issue with lying straight to your face. That is not the case in most depositions, but when faced with the possible deprivation of their property, the deponent in these depositions will flat out perjure themselves with no hesitation.
One such deposition I took, the debtor would not tell me who owned the house she lived in, even though: 1) I already knew that information and 2) it is a matter of public record. It was an exhausting deposition. I endeavored to make it as painful as possible on the deponent. I was able to create a good record, just in case I needed to show the court how deceptive and uncooperative the deponent was. Why take the deposition then? The deposition in aid can be necessary perhaps because you have exhausted all the fact finding you have made through third parties. It can also be valuable as a coercive tool for payment.
Get as Much Information as Possible from Third Parties
Due to the high level of self-interest, the deposition in aid is a somewhat unique creature. As a general rule, I do not like taking these depositions unless I have subpoenaed or questioned third parties for information first. Examples of third parties to subpoena before your deposition in aid are: 1) financial institutions the debtor might do business with; 2) mortgagees or landlords; and 3) employers or business associates. The list really is limitless. As discussed in our previous post, information is the most valuable tool in collecting a judgment.
It is important that the information you receive is objective fact. This is so when you take the deposition of the debtor, you can have an idea if the deponent is not being truthful, or forthcoming. By having a general understanding of the assets, you can manage your expectations at the deposition. Also, if worst case scenario, you must go back to the court for something said (or not said) by the deponent you have proof of the statement’s veracity. It is good practice to have the debtor produce any documents (via request for production or subpoena duces tecum) prior to the deposition. This is so you have more information prior for preparation. In my experience however, the debtors rarely produce this information (thus necessitating the need to go to third parties FIRST).
Show the Debtor that Creditor is here to Stay
Another compelling reason to schedule the deposition of the debtor is to simply show the debtor that the creditor is serious. The reason most judgments go uncollected is because most judgment creditors do not have the desire or the counsel skilled or dedicated enough to do it. Judgment Debtors in turn, eventually forget about their obligation to pay. DO NOT LET THEM FORGET! In closing, a deposition in aid of execution can be a powerful tool in collecting a judgment. Contact Andre Law Firm, if you have any questions about this tool and the collection process.
We’ve had such an overwhelming response to our recent journal posts that we decided to a short FAQ, regarding questions people/colleagues have had regarding collection law and our practice. The FAQ’s will be answered by Andre Law Firm P.A. founder and managing shareholder Tony Andre.
Q: What is the hardest collection you ever did?
A: We are currently in it now. It involves a Debtor who was in the national news cycle in 2019 involving the then president of the United States (the debtor is NOT the former president). We had been trying to collect against the Debtor in that case for some time before the 2019 controversy and the case is still not wholly resolved and still has a way to go. It’s been a grueling ordeal, but the funnest case I’ve ever had also.
Q: What is the best part of Collections law
A: Achieving a tangible result for the client. The system can be so messed up when your client through no fault of their own loses money to a debtor who refuses to pay (and often can) after a litigation produces a judgment. Getting a result for the client makes the practice rewarding, because I know how frustrating the whole process was for them.
Q: What is the most frustrating part of collection law?
A: Florida is a debtor-friendly state! You always have to view collections from that lens. The laws favor the debtor generally so you usually have to go into court well briefed and laser focused because there are many avenues for the debtor to get out of paying. That being said, it is incumbent to be aggressive for your clients and put the Debtor on notice that they have a fight ahead of them, and they ought to work it out.
Q: Does Andre Law Firm have any other practice areas?
A: Yes! Our firm is a general commercial litigation and business law practice first and foremost. Tony Andre, Esq. learned under great legal minds in the area of creditor’s rights and commercial law. He also practices creditor’s rights, commercial landlord tenant law, business law litigation, employment, and general civil matters.
Q: When you get a new collections case do you serve a demand letter?
A: Post judgment? No, as a general matter. We almost always let our actions do the talking, that being said there’s a time and a place for everything. This practice takes a lot of creativity, so you never rule anything out. We like to usually “take a shot across the bow” in the form of some sort of targeted collection effort for maximum effect.
Q: Can you depose an individual debtor’s family members in aid of executing a judgment?
A: If it’s relevant.
Q: What do you think is the most important part of post judgment collection work?
A: Information (mostly in the form of discovery!). We speak to this in a prior post.
Q: How long has Tony Andre practiced law?
A: I have been a member of the Florida bar since September 2007 and have worked continuously since then. I am also admitted to New York (2010) but do not practice in that jurisdiction very much.
Q: Have you ever collected a judgment in another country?
A: A few times! Most notably we domesticated and enforced a judgment from Florida in Egypt and was able to collect on it. It was a really interesting process! Time consuming for sure.
Q: What’s the weirdest thing you ever levied?
A: The Unites States Patent for an anti-snore pillow. I will undoubtedly write about this in a future blog post, it was a really fun collection.
Q: Do you do debtor’s work?
A: Not really, too many conflicts, but we are always willing to talk about a case.
In an earlier post we discussed the process for levying a vehicle. In this post we will discuss the process for the levy of real property.
Threshold Issues
A couple of issues that must be addressed in any levy involves 1) is the property worth it and 2) is my judgment lien perfected? We have discussed the perfection issue in this past post, and for the purposes of this post we will assume that the lien was properly perfected. In a recent post, we also discussed some threshold issues as to determining whether an asset was worth levying and questions which need to be answered to make that determination. Principally, whether the Debtor owned the asset outright or whether the asset subject to certain interests (exemptions or liens). The analysis for real property levies is similar.
Is there a Mortgage? Is the Property Homestead?
I think the single most determinative issue on whether property is worth levying is whether it is subject to a mortgage. Often times debtors who fail to pay one creditor, often fail to pay numerous creditors. If you have a mortgage in default from the purchase money lender, your judgment lien will eventually be extinguished in a subsequent foreclosure. If the mortgage is in place and you levy that property Creditor takes that property subject to that mortgagee’s interest. It is not ideal. I’ve had investor clients do this with the purpose of renting the levied property to make money in the short term, but that strategy is not for everyone.
The easiest way to determine whether there is a mortgage is to order a title search or ownership and encumbrance report. There are many great companies that provide this service for cheap (less than $100) and quickly. In the best-case scenario, Debtor will own the property free and clear (or subject to minor junior liens). Taking subject to a mortgage can also be worth it, if the debtor has a lot of equity in the target property sought to be levied.
It should be noted our firm deals primarily with commercial collection matters, and for the purposes of this example we are assuming that the property sought to be levied is not subject to Florida’s very strong homestead exemption. Article X, Section 4 of the Florida Constitution. Obviously if the property is the Debtor’s homestead, a normal judgment lien would not be effective in levying this type of property.
Look to your Sheriff (again)
As we discussed in our prior post about levying vehicles, the process for levying real property is largely uniform but is subject to certain individual requirements of the local sheriff offices which may be conducting the levy. The Basic process is as follows.
1) Perfect of your judgment lien
2) Delivery of Documents to Sheriff. The documents that every sheriff will need for a levy are an original Writ of Execution from the Clerk of Court; Certified copy of the final Judgment; Certified copy of vesting deed; An an Affidavit of outstanding liens, and Levy Instructions for the Sheriff. Some sheriffs will also require title search (such as Broward County).
4) Publication of Levy by Sheriff.
5) Sale of property by the Sheriff.
Conclusion
Unlike car levies, the costs/deposits tend to be much more uniform in nature from county to county. I prefer real properties when available because the market for these sales tends to be more competitive and more sophisticated. This was probably due to the foreclosure crises from years ago. We have used real property levies to great effect in our practice. If the property is owned outright, it will often cover the cost of the judgment, or force the Debtor into immediate settlement unencumbered real property in Florida is a most valuable asset. If you have questions about real property levies contact Andre Law today.
In our last post, we discussed the process for attaching a Debtor’s interest in a closely held corporation. In that post we discussed the following example. Debtor, an individual, holds a 45% interest (non-controlling) in a corporation that rents luxury properties, and is cash flowing. Your Debtor’s other obvious assets (house and car) are exempt from levy. In that post we discussed what the procedure for attachment of his shares was. What if instead of a corporation the entity was a limited liability company? This poses a different issue, but the interest is attachable (in a way) and we will discuss.
Charging Order
A charging order is the primary way to collect upon the debtor’s business interest in a partnership, limited partnership or limited liability company (LLC). SeeFla. Stat. § 620.8504; Fla. Stat. § 620.1703;Fla. Stat. § 608.433(4)(a). Once a final judgment is entered, and the creditor has knowledge of the debtor’s business interest(s), the Creditor can motion the court for a charging order. The process is very straight forward.
Single Member Multi-Member Distinction
A charging order provides the creditor with only the rights of an assignee as to the Debtor’s interest. This allows the creditor to receive Debtor’s distributions but does not allow Creditor to assert control over the business through the Debtor’s interest. In the case of a partnership and a single-member LLC, however, the charging order creates a lien that Creditor can foreclose upon pursuant to a court-ordered foreclosure sale. See Fla. Stat. § 608.433(6); Fla. Stat. § 620.8504(2). A foreclosure sale via charging order is not available against an interest in a multi-member LLC or a limited partnership. Fla. Stat. § 620.1703(3).
The Supreme Court of Florida ruled in Olmstead v. Federal Trade Commission, 44 So.3d 76 (2010), that a judgment debtor could surrender all right and title in the debtor’s limited liability company to satisfy an outstanding judgment.” 44 So.3d at 78. The Court recognized that a “LLC is a type of corporate entity, and an ownership interest in an LLC is personal property that is reasonably understood to fall within the scope of corporate stock.” Id. at 80. The Court in Olmstead reasoned “the general rule is that where one has an ‘interest in property which he may alien or assign, that interest, whether legal or equitable, is liable for the payment of his debts.’” Id. at 80 (quoting Bradshaw v. Am. Advent Christian Home & Orphanage, 199 So. 329, 332 (1940)).
Conclusion
While the Charging Order Remedy in our example would not allow for Creditor to take over the Debtor’s 45% interest outright, the Creditor would serve a copy of the charging order on the LLC and the business would be forced to pay the distributions that would flow to the debtor to Creditor until the judgment is satisfied. The Charging Order is a great tool when you have a profitable limited liability company or partnership. If you have any questions about the Charging Order process or any collection questions contact Andre Law today.
When we think of levying assets to satisfy a judgment we often think of things like cars and real property. A category of assets which are often ignored are business interests held by a Debtor. Most of the time those interests are either shares in a closely held corporation or an interest in a limited liability company. This post will deal with shares of stock.
Levying Debtor’s Shares in a Closely Held Corporation
In the situation where you might have a judgment against an individual (or entity) which owns shares in a cash flowing corporation, you have a potentially valuable asset. In our example let us assume Debtor (an individual) owns a 45% interest (non-controlling) in a Florida corporation that owns and manages luxury rental properties. Debtor refuses to pay the judgment but has no other tangible non-exempt assets (e.g. leases his car, rents his home or owns the home and bank accounts with his wife as tenants by the entireties, etc.). All hope is not lost however, as the Debtor owns these shares and you have searched the Florida Secretary of State Division of Corporations (www.sunbiz.org) and the corporate records tell you exactly the extent of that ownership.
Needle in a Haystack
These shares are absolutely subject to execution to satisfy the judgment of Creditor. The levy and sale of corporate stock on execution by a judgment creditor is specifically authorized by statute. See Fla. Stat. § 56.061. The statute states in relevant part “Lands and tenements, goods and chattels, equities of redemption in real and personal property, and stock in corporations, shall be subject to levy and sale under execution.” Id. As a practical matter however, the sheriff will not levy on shares as they are too difficult to locate. Often the “shares” in a closely held corporation have not been physically produced or in the rare event they have been they could be located anywhere (needle in a haystack). The workaround solution is that virtually every sheriff in the state of Florida requires Creditor to get a court order that either 1) compels the debtor to produce shares if they are in existence or 2) make the debtor (or company) actually issue those physical shares. I will warn you often you have to follow up such motions with motions to compel, but in our practice, we’ve found this stratagem as a good tool to produce a settlement (or obtaining the asset outright).
Conclusion
It should be noted, that while we are talking about shares of stock in a closely held business the debtor may draw income from, Fla. Stat. 56.061 also applies to actually shares of stock which may be traded on a stock exchange (e.g. Disney, Coca-Cola, etc.). Those are valuable assets subject to execution, however Fla. Stat. 56.061 still has not caught up to the age we are living in, if your Debtor owns assets such as this they are so easily transferrable Creditor would probably have to avail themselves of Fla. Stat. 56.29 to gain some sort of injunctive relief to levy assets such as this in today’s modern age (where one can dispose of stocks by just going online). If you have questions about levying stock, please contact our firm today.
In a prior post we posed the question of “My Debtor has a Valuable Asset How do I Collect?” In that post we focused on whether the levy of a particular asset was indeed worthwhile, and in that post, we used a 2020 Mercedes AMG GT Coupe (MSRP $116,000) as our example. For this post we are going to assume that Creditor wants to levy that 2020 Mercedes AMG GT Coupe. How exactly does one levy a vehicle in Florida?
Threshold Issue- Perfection
We have discussed in a prior journal post, that judgment lien perfection is the first collection step which should happen immediately after the judgment is entered. In short, a creditor must obtain a judgment lien certificate to perfect a judgment lien on personal property and to preserve judgment lien priority. A vehicle, being personal property (as opposed to real property), is one that would be affected by such a lien interest.
Look to your Sheriff’s Office
While the process for a vehicle levy is uniform throughout the state in large part, the particulars of any specific levy can vary fairly widely from county to county. This is were having a skilled collection law firm like ours is crucial. Each sheriff’s office has different cost deposits, and slightly different requirements for a levy, so it is important that your lawyer know what some of these issues are and how to deal with them.
That being said the basic procedure is as follows:
1) Perfect of your judgment lien
2) Locate the vehicle! (it is the responsibility of the creditor to locate the vehicle not the sheriff)
3) Delivery of Documents to Sheriff. The documents that every sheriff will need for a levy are an original Writ of Execution from the Clerk of Court; Certified copy of the final Judgment; An affidavit of Judgment lien Priority (F.S. 56.27), an Affidavit of outstanding liens, and Levy Instructions for the Sheriff. Every sheriff we ever dealt with also required title work showing that the car is indeed owned by the judgment debtor (this can be ordered from the state of Florida Department of Highway Safety and Motor Vehicles).
4) Publication of Levy by Sheriff.
5) Sale of vehicle by the Sheriff.
Closing
While the basic procedure is easily explainable, total process can be somewhat difficult/labor intensive. The devil is definitely in the details here. One thing we have not discussed here, is the “break order” which you must petition the court for. A break order allows you to access the property you seek to levy if it’s in an enclosure or locked area. It allows the creditor to take reasonable measures (e.g. a locksmith) to access such an enclosure (like a garage in this case). It should also be noted that some sheriff’s offices can make the whole process more tedious than others. Please keep in mind that the deposit required for levying a vehicle can vary wildly (from as low as $700 to as much as $5000) depending on the county you are dealing with. Contact Andre Law Firm today to discuss any collection related issues or questions you might have.
As we have discussed on our firm’s website, most judgments go unpaid. Courts do not collect or force judgment debtors to pay judgments outright. Often obtaining the judgment against the debtor is just the first step, and usually the Debtor has to be legally coerced into paying anything.
Many debtors, while litigation is ongoing, attempt to judgment proof themselves. This becomes inevitable, when the debtor knows they will not prevail in the underlying suit, and a big verdict or judgment is looming. Often with the threat of judgment, debtors fraudulently convey assets to third parties, in an attempt to conceal those assets from creditors.
Luckily, there are procedures for attacking (and unwinding) these fraudulent conveyances, so that the transferred asset can be attached or levied for satisfaction of the underlying judgment. We will briefly discuss here, Florida’s laws on fraudulent transfers.
Fraudulent Transfer Defined
Under Florida’s version of Uniform Fraudulent Transfers Act (“FUFTA”), a fraudulent transfer is generally defined as “a transfer made or obligation incurred by a debtor if made with actual intent to hinder, delay or defraud any creditor of the debtor” or a transfer made “without receiving a reasonably equivalent value in exchange for the transfer or obligation.” Fla. Stat. § 726.105(1)(a)(b). The purpose of the act is to bring back fraudulently transferred assets back to the judgment debtor (and thus reachable by the creditor) or to render a money judgment against the transferee.
Actual and Constructive Fraud under FUFTA
There are basically two broad types of fraudulent transfers under FUFTA. Those types are “actual” and “constructive.” An “actual” fraudulent transfer, in one which focuses on the transferor’s intent to delay, defraud or hinder creditors (Fla. Stat. § 726.105(a)). This is differentiated from “constructive” fraudulent transfer, which focuses—not on the transferor’s intent—but some of the circumstances surrounding the transaction (Fla. Stat. §§ 726.105(1)(b); 726.106(1) and 726.106(2)). Of course, proving actual intent of a debtor can be difficult, so FUFTA provides a list factors—or “badges of fraud”—which a Court can use to infer the debtor’s intent (For example, transfer of the asset to a close family member or “insider” as defined by the act). See Fla. Stat. § 726.105(2). Proving a constructive fraudulent transfer, on the other hand, requires proof that the debtor (i) did not receive reasonably equivalent value for the asset; and (ii) the transfer rendered the debtor insolvent. Fla. Stat. §§ 726.105(1)(b); 726.106(1) and 726.106(2).
Remedies under FUFTA
FUFTA sets forth six basic remedies available to creditors: (1) avoidance of the transfer; (2) attachment of the asset; (3) injunctive relief to prohibit further transfers; (4) appointment of a receiver; (5) levy and execution; and (6) “any other relief the circumstances require” Fla. Stat. § 726.108(1)–(2).
Usually, a creditor will seek the remedy of avoidance of the transfer or a money judgment against the transferee of the asset. “[FUFTA] is either an action by a creditor against a transfer directed against a particular transaction, which, if declared fraudulent, is set aside thus leaving the creditor free to pursue the asset, or it is an action against a transferee who has received an asset by means of a fraudulent conveyance and should be required to either return the asset or pay for the asset (by way of a judgment and execution).” Yusem v. South Florida Water Mgmt. Dist., 770 So. 2d 746, 749 (Fla. 4th DCA 2000).
If the creditor does not seek to unwind the transaction, alternatively the creditor can look to obtain a money judgment against the transferee. The money judgment will be in the amount of the value of the asset transferred, at the time of the transfer, or the amount necessary to satisfy the creditor’s claim, whichever is less. Fla. Stat. § 726.109(2).
Closing
FUFTA provides a powerful tool in the judgment creditor’s arsenal to go after debtors who attempt to judgment proof themselves, prior to judgment being entered. We discussed in a past journal, how FUFTA and Fla. Stat. 56.29 are often used in tandem to attack fraudulent transfers. If you have any questions on how Andre Law Firm P.A. can assist you regarding fraudulent transfers contact us today.
I would like to pose this premise to you. You have worked hard and spent money to obtain a final judgment, but the judgment debtor will not voluntarily pay. How do you collect? Perhaps this is the wrong question to ask. The fundamental question should be “Can you collect?”
Obviously, if you are the meritorious party in a lawsuit against a company like AT&T or Suntrust, you can rest assured, you will likely be paid. The issue of non-payment most often comes against lawsuits against closely-held companies, individuals, or family-owned operations.
Often to even obtain a modest judgment (let’s say $50k), it can take five figures worth of money spent on attorneys’ fees (and court costs) to obtain that modest result. Combine that with the fact judgment creditors can get so emotionally invested in the outcome of a litigation they often get irrational regarding their own case’s potential for collection.
Research the Debtor
In order to determine whether a judgment can be collected, it takes a global view of the judgment debtor and its finances. While no mathematic formula exists in determining whether a judgment is collectable you should start with some threshold questions:
Has the law firm that obtained the judgment perfected your judgment lien?
Did your judgment require the judgment debtor to serve a fact information sheet?
If the Judgment Debtor is a business entity, is that entity still operating?
What type of assets does the Judgment Debtor own (e.g. real property, vehicles, assets of the variety that would show up on an asset search (like certain equipment)).
Has the judgment debtor made any transfers of assets lately?
These considerations may seem obvious, but I can’t even tell you how often people come to me to collect judgments that are obviously uncollectable. Often people do not want to hear that the judgment is not collectable (even when you provide evidence on why it is not collectable). Perhaps they do not care the judgment is uncollectable and they just want someone working on it for a contingent fee hoping for a miracle.
The general fiscal health of the judgment debtor (and if an entity, the principals comprising the management of the judgment debtor) helps paint a picture of collectability. There are many tools you can utilize to help paint that picture, such as asset searches, public records searches (like UCC Lien searches, or searches of the official public records), and simple internet searches. Sometimes it is even advisable to hire a private investigator to research your debtor’s finances.
Lien Perfection and Passive Collection
Keep in mind that a judgment that is not collectable now might not always be uncollectable. That’s why judgment lien perfection is so important. “Has the lawyer that obtained the judgment perfected your judgment lien?” In a previous journal entry, we discuss the process and importance of perfecting your judgment lien as soon as possible. Preserving the priority of your lien may allow you to collect passively (e.g. judgment debtor trying to sell or refinance real property has to address your judgment lien).
Moreover, you might even find 2 or 3 years down the road, the judgment debtor has gotten back on their feet and you can now actively collect your judgment. If the judgment is currently uncollectable, it is advisable to keep an eye on the judgment debtor from time to time. Often judgment debtors (particularly individuals) are very entrepreneurial and will move on to the next hopefully profitable venture.
Not having a realistic assessment or expectation of the collectability of a judgment is often a recipe for disaster. Contact Andre Law today to figure out if your money judgment is one which you can collect against.
Post-judgment collection, like most litigation, is more art that science. Often, successfully collecting on a non-paying judgment debtor is made possible by the proper pressure point being leveraged into a positive result for your client. Most of time, a collection is not made because you found some hidden asset or bank account to levy or garnish.
More often than not it is information you discover, that leads to your collection. In the bulk of our collections practice, we deal with closely-held concerns who can nimbly hide or conceal assets. Treating these debtors like they are Fortune 500 company is an exercise in futility. Judgment Debtors consisting of closely-held entities or individuals are some of the hardest to collect against. They routinely ignore post-judgment discovery requests and subpoenas with little fear or respect of court sanction.
Third-Party Discovery
The key to finding valuable information starts with obtaining as much third-party discovery as possible to paint a picture of your debtor’s financial condition. In our experience, we have found even the most “scrupulous” of people, when faced for a debtor’s exam or deposition in aid of execution (or any post-judgment discovery), will gladly lie to the examining lawyer’s face or flatly perjure themselves in their interrogatory responses or fact information sheet.
It is incumbent upon the judgment creditor’s attorney to get as much information from third parties who have no incentive to lie about the financial information requested. Obviously, if you are aware of where the judgment debtor has banking relationships, banks are a perfect place to start, but a lot of useful financial information can be held by customers, utility companies, title agents, etc. The list of possible valuable information is quite simply endless. Only when you have a lot of verifiable third-party information is a good deposition in aid of execution of the judgment debtor recommended, and most often it is still more often used as a tool of coercion (they are typically not pleasant, so debtor’s seek to avoid them especially if they plan on perjuring themselves anyway). So, in this respect the collection attorney turns into part private investigator to find useful information and piece it together. In the best cases this may lead to an asset or a pressure point.
Use of Third-Party Discovery
For example, recently our firm was hired by another law firm to collect a modest judgment against an auto body shop. We were able to quickly satisfy a portion of our judgment via quick garnishment, but the trail went cold thereafter. Our firm then sprang into action and researched the debtor closely and found a real estate transaction where the judgment debtor was seller. A subpoena was served on the purchaser for documents regarding the sale (how the purchaser purchased the property and the like). When we were speaking to the subpoenaed deponent about the document production, the deponent mentioned that the judgment debtor moved its business across the street and renamed it. A quick search with the Florida Department of State Division of Corporations found that the judgment debtor had started a whole new business incorporated by its principal’s wife across the street, giving rise to a successor liability claim (successor liability to be discussed in future blog). We then approached judgment debtor’s counsel with this information and a signed and finalized motion to commence proceeding supplementary (which impleaded the wife and the successor entity, which we threatened to file) a full settlement was reached shortly thereafter.
It was not the court or sheriff that led to this settlement. Not a garnishment or levy. It was confronting the judgment debtor with its actions and the threat of putting other creditors on notice of the judgment debtor’s essentially fraudulent transfer in the form of successor liability that led to the positive result for our client.
Andre Law Firm P.A. is well-versed on creative and sophisticated methods of debt collection that assists our clients (and other law firms) in collecting against judgment debtors. Please contact us today, to see how we may be of service.
