CFL Asset Tracing & Recovery 3

Question 1

The equitable doctrine of 'marshaling of assets' requires:

Accepted 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

Answer

Law enforcement to physically seize and catalog all debtor property

Answer

The court to convert all secured claims to unsecured claims for equitable distribution

Answer

A trustee to prioritize administrative expenses over all pre-petition claims

Question 2

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

Accepted Answer

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

Answer

Traditional bank subpoena and Suspicious Activity Report (SAR) analysis

Answer

SEC EDGAR database searches for undisclosed digital asset holdings

Answer

SWIFT network monitoring reports from correspondent banks

Question 3

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

Accepted Answer

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

Answer

A preponderance of evidence that fraud occurred at some point in time

Answer

Probable cause established by a prior law enforcement investigation

Answer

Proof beyond a reasonable doubt that assets were obtained illegally

Question 4

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

Accepted Answer

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

Answer

Each defendant is independently liable for the full judgment amount with no limit on total recovery

Answer

Defendants always split liability equally regardless of their degree of fault or involvement

Answer

Recovery is limited to the defendant with the greatest available assets

Question 5

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

Accepted Answer

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

Answer

Transfer the debt obligation to a third party without the debtor's consent

Answer

Convert the repaid debt from secured to unsecured status automatically

Answer

Obtain a new lien superior to all existing liens on the debtor's property

Question 6

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

Accepted Answer

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

Answer

Automatic recognition of all foreign bankruptcy judgments as binding in US courts without further proceedings

Answer

A global creditor priority system that supersedes domestic bankruptcy law

Answer

An international asset registry where debtors must register property located in multiple jurisdictions

Question 7

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

Accepted Answer

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

Answer

Compel a third-party witness to appear and testify at a post-judgment hearing

Answer

Freeze the debtor's bank accounts pending the debtor's appeal of the judgment

Answer

Automatically transfer title to the debtor's real property to the judgment creditor