Legal Definitions - prejudgment attachment

Prejudgment attachment is a legal procedure that allows a plaintiff (the person or entity bringing a lawsuit) to temporarily seize or place a lien on a defendant's (the person or entity being sued) property *before* a final court judgment has been rendered in the case. The primary purpose of this action is to prevent the defendant from hiding, selling, or transferring assets that could be used to satisfy a potential future judgment if the plaintiff ultimately wins the lawsuit. It acts as a security measure, ensuring that if the court rules in favor of the plaintiff, there will be assets available to collect the awarded damages.

To obtain a prejudgment attachment, the plaintiff typically must demonstrate to the court that there is a strong likelihood they will win the case and that there is a risk the defendant might dispose of their assets before a judgment can be enforced. Courts usually require the plaintiff to post a bond, which serves as a financial guarantee to protect the defendant in case the attachment is later found to be wrongful or the plaintiff loses the lawsuit.

• Example 1: Business Contract Dispute

  A small manufacturing company, "InnovateTech," sues a larger distributor, "GlobalSupply," for breach of contract, claiming GlobalSupply failed to pay for a substantial shipment of custom-made components. InnovateTech has evidence suggesting GlobalSupply is experiencing severe financial difficulties and might be liquidating assets or transferring funds to offshore accounts to avoid its creditors. Fearing that a future judgment against GlobalSupply would be uncollectible, InnovateTech asks the court for a prejudgment attachment to freeze a portion of GlobalSupply's domestic bank accounts or place a lien on some of its valuable inventory. This action aims to secure funds that could be used to pay InnovateTech if it wins the breach of contract lawsuit, ensuring assets are available before a final court decision is made.

• Example 2: International Debt Recovery

  An overseas investor, "AquaFunds," loaned a significant sum to a local real estate developer, "Coastal Properties," for a luxury beachfront project. Coastal Properties defaulted on the loan, and AquaFunds filed a lawsuit to recover its money. AquaFunds discovers that Coastal Properties is attempting to quickly sell off the undeveloped portions of the beachfront land and transfer the proceeds to a subsidiary in another country, potentially making it impossible for AquaFunds to collect if it wins the case. AquaFunds petitions the court for a prejudgment attachment, seeking to place a lien on the remaining real estate assets owned by Coastal Properties. This prevents Coastal Properties from selling or encumbering the property until the court decides whether AquaFunds is entitled to recover its investment, thus securing the asset for a potential future judgment.

• Example 3: Fraud and Embezzlement

  Dr. Anya Sharma sues her former financial advisor, Mr. David Miller, alleging that he fraudulently embezzled a large sum of money from her retirement accounts over several years. Dr. Sharma's investigation reveals that Mr. Miller has recently put his luxury home up for sale and is making arrangements to move out of the country. Concerned that Mr. Miller will disappear with the remaining funds and assets before the lawsuit concludes, Dr. Sharma requests a prejudgment attachment. The court grants the request, placing a temporary freeze on Mr. Miller's bank accounts and a lien on his luxury vehicle. This action ensures that if Dr. Sharma proves fraud and wins her case, there will be identifiable assets belonging to Mr. Miller from which she can recover her stolen funds, even before the judge issues a final ruling.