Purchase of judgement

[Richard Hughes]

Jurisdiction

New York

Hi,

I started work in May 2017 in London. Before starting work I found out that the beneficial owner of the company I was starting work for had a 7 figure judgement against him in New York and as a result had left the USA.

In subsequent conversations with the beneficial owner (who had no official title in the firm but was clearly the boss) I found out that he still had assets in the United States. This conversation was outside the workplace and had no relevance to the company I was working in or the work we did.

The assets would be very difficult to find for the owner of judgement unless he knew where to start looking.

I am due to finish my work in the company next month. My plan would be to approach the creditor to buy the judgement and then use what the debtor told me about his assets to crystallize the value of the judgement.

What I would like to know is

1) Would I be breaking any law by using information given to me by the owner of a firm who is the debtor?

2) Is a New York judgement easily enforceable in other states

 

[zddoodah]

Would I be breaking any law by using information given to me by the owner of a firm who is the debtor?

This is somewhat awkwardly worded, but what you're suggesting would not be illegal (although some might call it snake-like and others might call it brilliant).

Is a New York judgement easily enforceable in other states

A judgment entered in any state can be enforced in any other state by domesticating the judgment. Each state's procedures are a little different, but the process usually involves filing an application to enter judgment based on a sister-state judgment. In my state, this is done by filing a fill-in-the-blank form. You then have to serve notice on the judgment debtor and have to wait 30 days before you can enforce the judgment. While there is an opportunity for the debtor to oppose the domestication, the grounds for doing so are extremely limited. You'll have to decide for yourself whether that process (which, again, will vary from state to state) falls within your definition of "easily." A couple additional observations:

You will presumably have to pay the current judgment creditor up front for an assignment of the judgment. Given that this is "a 7 figure judgement" (i.e., a judgment worth somewhere between $1,000,000 and $9,999,999), I'd be surprised if you won't have to come up with at least a quarter million dollars and maybe multiple millions of dollars. Do you have that kind of capital? If you do, then before you spend it, you really should first confer with a debt collection attorney in the state where the debtor's assets are located so that you will know what it will take to execute a judgment against those assets.

 

[Richard Hughes]

This is somewhat awkwardly worded, but what you're suggesting would not be illegal (although some might call it snake-like and others might call it brilliant).



A judgment entered in any state can be enforced in any other state by domesticating the judgment. Each state's procedures are a little different, but the process usually involves filing an application to enter judgment based on a sister-state judgment. In my state, this is done by filing a fill-in-the-blank form. You then have to serve notice on the judgment debtor and have to wait 30 days before you can enforce the judgment. While there is an opportunity for the debtor to oppose the domestication, the grounds for doing so are extremely limited. You'll have to decide for yourself whether that process (which, again, will vary from state to state) falls within your definition of "easily." A couple additional observations:

You will presumably have to pay the current judgment creditor up front for an assignment of the judgment. Given that this is "a 7 figure judgement" (i.e., a judgment worth somewhere between $1,000,000 and $9,999,999), I'd be surprised if you won't have to come up with at least a quarter million dollars and maybe multiple millions of dollars. Do you have that kind of capital? If you do, then before you spend it, you really should first confer with a debt collection attorney in the state where the debtor's assets are located so that you will know what it will take to execute a judgment against those assets.

Thanks for coming back so quick. Forgive the awkwardness of the wording but I am not a lawyer. I am aware of what I am proposing if snake like but the judgement debtor in this case is a man of no scruples and if I do manage to do it I will sleep easily because the debtor has done numerous things like this himself. Just a couple of clarifications on the points you made

1) To domesticate the judgement you have to serve notice on the judgement debtor and wait 30 days to enforce. In those 30 days can the judgement debtor move assets out of the jurisdiction and if so would there be any way to stop this?

2) Given the judgement debtor is both financially and legally sophisticated and with unlimited money to spend on blocking the process, I would rather not purchase the judgement upfront. I was wondering if I could enter into an agreement with the judgement creditor that we share the proceeds 50/50 if I manage to settle in a specified timeframe? (1- 2 yrs lets say). Are agreements like this common? The judgement creditor never expects to receive anything from this judgement and hence that would be his motivation for an agreement like this with me.

 

[zddoodah]

In those 30 days can the judgement debtor move assets out of the jurisdiction

Obviously, I have no information about what this person is capable of, and the ability to move an asset depends on what sort of asset it is. In a purely hypothetical sense, pretty much any asset other than real property can be moved, and yes, the notice of intent to domesticate a judgment might prompt a debtor to move assets.

and if so would there be any way to stop this?

Depending on the applicable state law, it might be possible for the judgment to be entered and enforcement to be allowed prior to giving notice. Obviously, this is something else to discuss with a debt collection attorney.

I was wondering if I could enter into an agreement with the judgement creditor that we share the proceeds 50/50 if I manage to settle in a specified timeframe?

Whether you can do this or not is obviously up to the judgment creditor.

Are agreements like this common?

No, but the commonality or lack thereof is really neither here nor there -- especially since the situation you have described is, itself, somewhat uncommon.

 

[adjusterjack]

I was wondering if I could enter into an agreement with the judgement creditor that we share the proceeds 50/50 if I manage to settle in a specified timeframe? (1- 2 yrs lets say). Are agreements like this common?

Sure. They are common between judgment creditors and collection agencies who are hired on a commission basis.

The judgement creditor never expects to receive anything from this judgement and hence that would be his motivation for an agreement like this with me.

50% of something is better than 100% of nothing.

All you can do is ask.

 

[army judge]

Collecting a judgment looks easy.
You believe you know where the REAL SNAKE has concealed his assets.
He told you.
A sleazy person told you, so it must be true.
I've been approached to do exactly what you're contemplating.
It's incredibly time consuming, and very often a pointless effort.
If it were easy, the person holding the judgment would already have done it.

The guy isn't in London by accident.

If I were you, which I'm clearly not, I'd disabuse myself of this little scheme.

I doubt that you'll fare any better than the judgment holder has.