Navigating Global Matrimonial Disputes: Four Steps to High-Value Asset Recovery
Ultra-wealthy divorces can be drawn-out affairs that involve complex structures of assets located in multiple jurisdictions around the world.
November 12, 2018
While a divorce for the ultra-wealthy might be local, monetizing the resulting judgment requires sophisticated cross-border expertise.
A timely, proactive and creative asset recovery strategy leads to more money faster:
1. Mapping Out the Assets Is Never Enough (But You Should Still Do it)
The ultra-wealthy take advantage of complex, multijurisdictional asset protection structures to conceal their wealth, and use expensive international lawyers to stay one step ahead of the creditor. Simply mapping out a potential judgment debtor’s assets is never going to be enough to expose and lock down hidden assets.
In the absence of an aggressive strategy, high net-worth individuals’ assets will likely remain out of reach.
Court orders for the identification and seizure of assets can be obtained in many offshore jurisdictions, such as the Cayman Islands and the British Virgin Islands. Importantly, en route to offshore structures, funds must often pass through jurisdictions which are more creditor-friendly.
2. Start Yesterday
Our experience in executing global strategies for large court judgments is that the first six months post-judgment is a critical time for execution. Waiting until the date of judgment allows too little time to create the strategy and mobilize for its implementation, particularly when the execution will take place in multiple jurisdictions. Creditors who are not proactive may be too late.
3. Ask: What Does the Debtor Really Care About?
High net-worth individuals can afford to endure ongoing enforcement evasion. If a judgment debtor is willing to invest those resources to stop collection, a judgment creditor needs to target the assets the judgment debtor cares about the most. Identifying that pressure point, such as significant artwork or difficult-to-obtain box seats, freedom of movement (or even the dog) can complement traditional enforcement methods. Legal techniques which destabilize the debtor’s way of life will force him or her to consider whether running forever is worth it.
4. Yachts, Planes, and Luxury Cars
High-value possessions owned by judgment debtors such as yachts, private jets and luxury automobiles are badges of wealth and prestige. However, there are special rules that affect the arrest and execution of these assets. They are not tied to a single jurisdiction and tend to be held in complex structures that will need to be attacked, possibly in another jurisdiction. The capacity to move fast and coordinate with local counsel to execute against these assets is an important part of a successful global execution strategy.
When it comes to these situations, obtaining a court judgment against the recalcitrant debtor is just the start of a global game of chess in which experience, creativity and global reach are essential.
About Kobre & Kim's International Judgment Enforcement & Offshore Asset Recovery Team
Kobre & Kim is a conflict-free Am Law 200 law firm focused on disputes and investigations, often involving fraud and misconduct.
The firm’s claim monetization and claim dilution team has significant experience acting on behalf of judgment and arbitration award creditors to develop and implement enforcement and asset tracing and recovery strategies to monetize high-value judgments, and is guided by an in-depth understanding of the latest asset structuring techniques and defensive litigation strategies that may be deployed by judgment/award debtors.
Many of our cases involve closely coordinated cross-border proceedings, and we are able to either advocate directly, or to work cooperatively with local counsel, in jurisdictions in the U.S., Asia, EMEA, Latin America and key offshore financial centres.