My Life as a Judgment Collection & Asset Recovery Treasure Hunter
I have been an attorney since 1991, with an emphasis on debtor and creditor rights and liabilities. In the last 10 to 15 years, I have mostly represented companies and people that are owed money and/or have money judgments.
Collection is often a social justice issue. My clients seek my services to collect on judgments connected to contractor malfeasance, unpaid rent, unpaid wages, landlord’s failure to return security deposits, sexual discrimination judgments, divorce judgments, including alimony and/or child support, or for a myriad of other reasons.
The typical debtor will go to great lengths to hide their assets so that they don’t have to pay a judgment or debt. That’s where I come in. I am known amongst many as the treasure hunter. I will hunt down assets of the debtor, through the judicial process, and grab those assets and use them to pay the judgment for my clients. Thus, in the area of commercial leases, after the landlord tenant process is completed, I will typically seek judgments against the personal guarantors and go after their assets.
In one such case, after I obtained the judgment against the personal guarantor, I discovered he was hiding his money in his company’s account. I restrained that account, which shut down his very active business, and within a few days, my client was paid in full.
Often, guarantors think that since their company vacated the commercial space, that they are no longer liable for outstanding rent owed by the company to the landlord. As per the terms of most commercial leases, this could not be further from the truth. In fact, typically, a company and its guarantor are liable for rent until the end of the term, which, unless the space is rented to a new tenant covering that unexpired term, for the same or greater rental rate, is likely to result in a large judgment against those entities.
In one such case, the guarantor, after vacating the premises, was under the impression that she was no longer liable to the landlord, fired her attorney, and then thereafter I obtained, on behalf of the creditor, a large judgment against the guarantor, for rent to the end of the term. I then sought to sell the guarantor’s house to satisfy the judgment, forcing an immediate settlement.
In the area of contractor malfeasance, I represented a businessman who hired a contractor to build a new apartment building. The contractor’s work was defective, and he abandoned the job in the middle of the project, after my client had paid him large sums of money. I obtained a significant judgment on behalf of my client for liquidated damages under the contract. I then sought to sell the contractor’s real estate, and after much litigation, including three separate bankruptcies filed by that contractor, the matter was settled and my client recovered a significant portion of his judgment.
Debtors often think that since much time has gone by since a judgment was entered against them, that they are safe from collection, and can go about their life, business as usual. However, in general, New York judgments are good for at least twenty years (and at least ten years as a lien against real estate). In one such case, a large judgment was entered against a debtor/guarantor for unpaid commercial rent, and six years went by. The debtor then died. I was then hired by the creditor, who believed, due to the debtor’s death, that they would not be able to collect on the claim. However, the debtor/guaranty had a large estate, which was probated with the value of the assets listed in the surrogate’s file. On behalf of the client, I filed a claim against that estate, which resulted in an immediate settlement of that claim. The more sophisticated Debtors will often hide their assets in corporations or limited liability companies or trusts, believing, wrongly, that those assets are not reachable by creditors.
In one such case, a debtor owned an empire of retail stores in multiple states. Each store was owned by a separate corporation, and the debtor was the sole officer and shareholder of each of the companies. My client worked for one of those stores and the debtor underpaid him for years. A large judgment was obtained against that debtor. I was hired to collect that judgment. The debtor reached out to me and insisted that he could only pay a small monthly amount to my client, which was rejected by the client. A turnover order of debtor’s shares in those stores to the Sheriff/Marshal for auction would likely have resulted in an undermarked sale price. Instead, on behalf of the creditor, I made a motion, seeking, among other relief, the appointment of a receiver for that empire, which resulted in a quick settlement of the judgment by the debtor, for a sizeable amount.
In another case, the debtor was an attorney that defamed my client and my client obtained a large judgment against him. My client hired me to collect that judgment. At or around the time that the judgment was granted, the attorney sold a valuable vacation home, which he transferred to an LLC, and then sold it on the open market, and transferred the sale proceeds to an annuity in the name of another LLC, with the debtor as the beneficiary. The debtor then ran off to South America and taunted my client (because he felt safe in South America) that my client could use the judgment as toilet paper, as my client would never collect. Through sleuthing on my part, I was able to discover that annuity and proved to the court that the annuity was not exempt from collecting on the judgment. The court ordered the turnover of sufficient funds from that annuity to satisfy the judgment and attorney’s fees in full.
In another case, I was hired by a former female employee of a bikini bar, who had a large judgment against that bar and its owner for sexual discrimination and abuse. The bar was located in a building owned by an LLC (“Building LLC”). The debtor and his wife were the sole members of the Building LLC. At or around the time that my client made her claims against the bar and debtor, the debtor closed the bar and claimed poverty. He also claimed that he had transferred to his wife interest in the Building LLC years ago (unfortunately for the debtor, the transfer was still within the statute of limitations for a fraudulent conveyance). The wife then obtained a buyer for the building. However, through steps taken by me, I was able to obtain, among other relief, a notice of pendency against the real estate, where the building for the bar was located. Thus, when the wife attempted to close on the building, she had to address my client’s claims… I was able to force the wife to place more than half of the sale proceeds in escrow, until this matter is resolved. In another instance, I represented a homeless woman who had a large unsatisfied multi-million dollar divorce judgment against her ex-husband. The ex-husband had remarried and gave his new wife money to purchase a fancy home in the Hamptons in her name. I moved to sell that house in order to satisfy the judgment . The debtor and his new wife were prolific frivolous litigators. They filed multiple actions against the creditor’s agent, my then firm, and me, in three different states, in multiple courts, and they each filed bankruptcy. They also transferred a portion of the ownership in that property to a disbarred attorney, who also proceeded to file bankruptcy. These actions so muddied the title of the property that no title company would insure the purchase of the property. We had to have the bankruptcy trustee sell the property in bankruptcy in order to get title insurance. However, at the end of the day the property was sold, and we recovered for the homeless woman’s estate, as she committed suicide before recovery. One of my sadder cases, but at the end of the day, social justice was done and the money went to the creditor’s nieces.