Legal Definitions - judicial sequestration

Judicial sequestration refers to a legal process where a court orders the temporary seizure and holding of specific property or assets. This action is taken to preserve the property, prevent its sale, destruction, or dissipation, and ensure it remains available to satisfy a potential judgment or court order. The court typically appoints a neutral third party, often called a sequestrator or receiver, to take custody of the assets until the legal dispute is resolved or further court instructions are given.

Here are some examples illustrating judicial sequestration:

• Dispute over a Unique Asset: Imagine two art collectors are in a heated legal battle over the rightful ownership of a newly discovered, extremely valuable painting by a renowned artist. Both present compelling evidence of ownership, and there's a risk that the party currently possessing the painting might attempt to sell it or move it out of the country before the court can make a final decision.

  In this scenario, a court might order judicial sequestration of the painting. A neutral third party, such as a professional art conservator or a court-appointed custodian, would take physical possession of the artwork, store it securely in a climate-controlled facility, and ensure its integrity until the court definitively determines its rightful owner. This action prevents either claimant from disposing of or damaging the painting while the legal process unfolds.

• Protection of Business Assets in a Fraud Case: A small technology startup discovers that its former CEO allegedly siphoned off significant company funds into personal accounts and is now attempting to sell off key intellectual property, including patents and software code, to a competitor. The startup files a lawsuit seeking to recover the embezzled funds and prevent the sale of its intellectual property.

  To protect the company's interests, the court could issue an order for judicial sequestration of the former CEO's bank accounts containing the alleged stolen funds and the disputed intellectual property. This would freeze the bank accounts, preventing further transfers, and place the intellectual property under the temporary control of a court-appointed receiver, ensuring these critical assets are preserved as potential remedies if the startup wins its lawsuit.

• Marital Asset Preservation During Divorce: During a contentious divorce proceeding involving substantial assets, one spouse learns that the other spouse is actively trying to sell off valuable joint property, such as a vacation home and a portfolio of investment stocks, and transfer the proceeds to accounts inaccessible to the court, potentially to hide them from equitable distribution.

  The court could order judicial sequestration of these specific assets. A court-appointed receiver might take temporary control of the vacation home (e.g., preventing its sale or rental) and the investment portfolio (e.g., freezing the accounts to prevent trades or withdrawals), ensuring these assets are preserved and available for fair division once the divorce settlement is finalized by the court.