Koehler v. Bank of Bermuda Ltd.

Landmark Opinion from New York Court of Appeals concerning Judgment Enforcement


A bank in New York can be ordered to bring into New York property held by the bank for another outside New York in order to satisfy a judgment against that person, under a recent decision of New York's highest court.

This decision resolved the question whether New York judgment enforcement orders can reach only assets held in New York or whether they can reach all assets wherever held. The new decision, while it dealt specifically with corporate stock held in Bermuda, in principle reaches bank accounts and any other property held outside New York as well.

It was already the law that a turn-over order could compel the judgment debtor to bring into New York property held outside New York. The new decision extended that rule to a third party holding property of or owing money to the judgment debtor.

The Court relied on Article 52 of New York's Civil Practice Law and Rules, which governs the enforcement of money judgments. Article 52 authorizes a judgment creditor to file a court proceeding to compel someone holding an asset of the judgment debtor (or owing a debt to the judgment debtor) to turn over the asset or pay the money owed to the judgment debtor or the Sheriff. Parties holding assets or owing money are commonly banks where judgment debtors have accounts.

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Reference Info:Decision | State, 2nd Circuit, New York | United States

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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