Asset Tracing & Recovery Flashcards

The equitable doctrine of 'marshaling of assets' requires:

Answer: A senior creditor with claims on two funds to first exhaust the fund not available to a junior creditor before accessing the shared fund

Marshaling requires a creditor who can reach two sources of repayment to first look to the source unavailable to a junior creditor, protecting the junior creditor's ability to satisfy their claim from the shared fund.

When tracing misappropriated funds through cryptocurrency transactions, which forensic tool category is most commonly employed?

Answer: Blockchain analytics platforms that map wallet addresses and transaction flows on the public ledger

Blockchain analytics platforms (such as Chainalysis, Elliptic, or CipherTrace) analyze the public blockchain ledger to trace cryptocurrency transactions, identify wallet clusters, and link addresses to known entities.

To obtain an ex parte asset freeze order without prior notice to the defendant, a plaintiff must typically demonstrate:

Answer: Likelihood of success on the merits, a real risk of asset dissipation, and that the balance of equities favors relief

Courts grant ex parte freezing orders only upon a showing of likelihood of success on the merits, immediate and irreparable risk that assets will be dissipated, and that the equitable balance favors the order—given that the defendant has no opportunity to be heard.

Under the 'single-satisfaction rule' in asset recovery litigation, what limits a plaintiff's recovery from multiple defendants?

Answer: The plaintiff may pursue multiple defendants but total recovery is capped at the amount of actual damages, preventing double recovery

The single-satisfaction rule allows plaintiffs to pursue all available defendants and remedies, but total recovery across all defendants cannot exceed the plaintiff's actual compensatory damages, preventing unjust enrichment through multiple recoveries.

In asset recovery, 'equitable subrogation' allows a party who pays another's debt to:

Answer: Step into the original creditor's shoes and assert the same rights, liens, and priorities against the debtor

Equitable subrogation allows the party who satisfies another's obligation (such as a guarantor or insurer) to be substituted for the original creditor, inheriting all of that creditor's rights, remedies, and security interests against the debtor.

The UNCITRAL Model Law on Cross-Border Insolvency (adopted in the US as Chapter 15 of the Bankruptcy Code) primarily provides:

Answer: A framework for cooperation between US and foreign courts in cross-border insolvency cases, including recognition of foreign proceedings and asset recovery coordination

Chapter 15 (based on the UNCITRAL Model Law) provides a structured process for US courts to recognize foreign insolvency proceedings and cooperate with foreign courts, facilitating coordinated asset recovery across borders.

A writ of execution in post-judgment asset recovery primarily serves to:

Answer: Direct a law enforcement officer to seize and sell the judgment debtor's non-exempt property to satisfy the money judgment

A writ of execution is issued by the court clerk after judgment and directs the sheriff or marshal to levy upon and sell the debtor's non-exempt personal or real property, with proceeds applied to satisfy the judgment.