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Summary of Supplemental Admiralty Rule B Attachment

Summary of Supplemental Admiralty Rule B Attachment. Prepared by: Freehill Hogan & Mahar, LLP. Text of Rule B .

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Summary of Supplemental Admiralty Rule B Attachment

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  1. Summary of Supplemental Admiralty Rule B Attachment Prepared by: Freehill Hogan & Mahar, LLP

  2. Text of Rule B If a defendant isnotfoundwithinthe district …a verifiedcomplaint may contain a prayer for process to attach the defendant’s tangibleorintangible personal property - up to the amount sued for - …The courtmustreview the complaint and affidavit, and if the conditions of this Rule B appear to exist, enteranorder so stating and authorizing process of attachment.

  3. Requirements for Rule B • Defendant Not Found Within the District • Maritime Claim • Property Within the District • No Bar to the Attachment

  4. Defendant Not Found in District • Depends on answer to two questions • Does the defendant do enough business within the district to be subject to the court’s in personam jurisdiction? • Does the defendant have an agent for service of process in the district?

  5. Must Have a Maritime Claim • Must have a valid maritime claim against the defendant(s) • Attorney’s fees & interest • Claims for indemnity / claims not ripe: may not support an attachment • Claims of alter ego status • Claims of paying agent status

  6. Property Within the District • Broad language – “tangible or intangible” • Electronic Fund Transfers • Why Southern District of New York? • State law – Winter Storm & Aqua Stoli cases • Transfers to or from the defendant • Still a hot issue • Letters of Credit

  7. No Statutory Bar • Must ensure there is no bar to pre-judgment attachment of defendant’s assets • Example: Foreign Sovereign Immunities Act • Contract precluding ancillary relief • Foreign litigation or arbitration

  8. No Need Requirement • Some judges had held that there was a “need” requirement to Rule B • Overruled by Aqua Stoli case in 2006

  9. Steps for Obtaining & Serving Rule B Order • Verified complaint & affidavit • Ex parte relief / without notice to defendant • Prima facie showing • Daily service on banks • Notice to defendant after property restrained

  10. Post-Attachment Hearing(Rule E(4)(f)) • Defendant entitled to prompt hearing (within 3 days) • Plaintiff bears burden of proof • Prima facie showing / reasonable grounds / probable cause • Review of extraneous evidence • Grounds for challenging

  11. Counter-Security • Admiralty Rule E(2): for limited costs (e.g. bond premium, bank charges) • Admiralty Rule E(7): for counterclaim arising out of the same transaction • Court has discretion • Failure to post after court order

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