Commercial Division Blog

Posted: July 31, 2023 / Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. Turner / Categories Commercial, Fraud/Misrepresentation, Attachment

Court Grants Attachment Where Defendant Foreign Corporation Sent Funds Abroad

On June 15, 2023, Justice Andrew Borrok of the New York County Commercial Division issued a decision in Altium Growth Fund, L.P. v. Tingo Group, Inc., 2023 N.Y. Misc. LEXIS 2999.  The Court granted Plaintiffs’ motion for an attachment pursuant to CPLR 6201(1), attaching shares in the Defendant Company.  The Court found that Plaintiffs had shown a likelihood of success on the merits, and further found that grounds for an attachment pursuant to CPLR 6201 exists, explaining:

Grounds for an attachment exist under CPLR 6201(1). The Defendant is a foreign corporation not qualified to do business in the state. Thus, the requirements of CPLR 6201(1) are satisfied. It also appears that grounds for an attachment exist under CPLR 6201(3), which provides for an attachment where a defendant, with intent to defraud creditors or frustrate the enforcement of a judgment that might be rendered in the plaintiff's favor, has assigned, disposed of, encumbered or secreted property, or removed it from the state or is about to do any of these acts. As alleged the defendants in this case are alleged to have sent substantial Company property to a company in Africa that is the subject of a major fraud concern and where outside counsel has been retained to conduct an investigation. In addition, even though the defendant has now acknowledged that a Fundamental Transaction did occur and urged this Court to enter judgment, no attempt was made to make any payments to the Plaintiff. Under the circumstances and given this admission, and the Defendant's request to enter judgment in favor of the Plaintiffs in a particular way and without prejudgment interest, this is prima facie evidence of an intent to defraud and frustrate a judgment.

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