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New York Court of Appeals Permits Extraterritorial Seizure of Assets in Aid of Judgments

June 17, 2009

By James E. Berger

On June 4, 2009, the New York Court of Appeals issued its ruling in Koehler v. Bank of Bermuda Ltd., a judgment enforcement case that squarely posed a question concerning the limits of a judgment creditors ability to seize assets located outside of New York. The Court of Appeals, which ruled in response to a certified question from the U.S. Court of Appeals for the Second Circuit, held in a 4-3 decision authored by Judge Eugene Pigott that under Section 5225 of the Civil Practice Law and Rules (CPLR), a New York court may order a third-party garnishee over which it has personal jurisdiction to turn over to the judgment creditor property that is located outside of New York. The courts decision constitutes a major victory for judgment creditors in New York, which, by virtue of its status as the financial center of the United States, is a key enforcement venue.