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Corporate Record Subpoenas
This article is my opinion, and not legal advice. I am a judgment broker, and am not a lawyer. If you ever need any legal advice or a strategy to use, please contact a lawyer.
The advanced ideas discussed in this article might be useful for only specific situations with close-knit small company "shenanigan" relationships involving a judgment debtor company. One should expect each party to have an attorney retained to try to block all attempts to get any information. I recommend you retain an attorney to attempt the kinds of post-judgment tactics discussed in this article.
In California, a Subpoena Duces Tecum (SDT) is used to request records. SDTs are not considered discovery tools. They are not within the civil discovery act, found under Production of Evidence, which is most often used pre-trial, and used for the production of evidence at a hearing or trial. Although one can argue that an ORAP (examination), whether of the debtor or a 3rd party, is a type of discovery, it is more than that. It is conducted as a hearing and therefore, the requirement for production of evidence at such a hearing is appropriate.
With company partner asset shenanigan/money laundering situations, the way toward following trails to potential income or assets to attach; is to have some kind of proof that the company(s) involved with the judgment debtor company is paying them, holding assets for them, or knows about their assets.
When you subpoena documents or have a hearing, it is best to not be stuck having a deadline of one day before the hearing, because you do not want your court documents stuck in the mail room on the day of your hearing at 9:00 AM. For example, a court hearing for October 20, 2015 at 9:00 AM. Indicate the due date to get the response to the court would be October 19, 2015 by 12:00 Noon. That way it arrives in the mail room and gets to the clerk probably by the end of the day on the 19th, and they have it in hand for you to retrieve the morning of the 20th at the hearing.
I have heard about so many subpoena document requests being stuck in the mail room, so do not get them for only a few days later. Do not make them due on the date of the hearing. You have to get those documents at the hearing, you cannot get them any earlier.
In California, the threshold for subpoenaing post-judgment witnesses is $250. When you have a good faith belief that a third-party is holding, or has first-hand knowledge about at least $250 worth of the judgment debtor's income or assets; they can become a witness to that.
As an example, you have a judgment against company A, and you have some evidence that leads you to believe the assets or income of A, may be involved with, at, or coming from, companies B and/or C.
The first step for this type of post-judgment information discovery is scheduling a judgment debtor examination with subpoenaed document production requests from the judgment debtor company; to determine which accounts, if any, they control, and whether such accounts are in their name or not. If company B and/or C is involved in any movement of money with A, you may be able to divert the cash flow with the appropriate court orders.
At least in California, along with your court-scheduled subpoena for a representative of company A (the judgment debtor) to appear at your judgment debtor examination; you could also subpoena representatives of companies B and C as witnesses to assets belonging to company A, as long as you believe and declare that they hold, or know of, at least $250, which belongs to A.
The primary goal of bringing in companies B and C is to have them answer questions about company A, and supply any documents, that show any of A's assets/income or rights to them. Subpoenaing third-parties to bring documents such as their banking records is a big deal, so make sure you have some evidence or a strong reason to believe they are paying company A, is involved with them, or knows something about their assets.
Either the representatives for companies B or C have or know about A's assets, or they don't. Either they will tell you the truth or they will lie. If you know they are lying, show them a copy of your proof. If that does not work, the only option left may be to start a new creditor's fraudulent asset transfer lawsuit; which is not guaranteed, cheap, or easy; and is way beyond the scope of this article.
If company B or C admits to possessing or having knowledge about company A's assets, that is a great start; however what counts are documents which prove it, or even better, the debtor company starts paying you. If you subpoenaed documents that A, B, or C did not bring; then ask the court to continue the examination to a future date when the parties can bring the subpoenaed documents.
Sometimes, asset transfers are valid and not designed only to thwart creditors. If that is the case, subpoenaed witnesses should provide a copy of their contracts with the judgment debtor company, because as a judgment creditor, you have a right to know about such contracts.
Sometimes companies factor invoices for each other, which occasionally gets used to help launder income. In such situations, perhaps you could get an order from the court which orders company A not to hypothecate (factor) any invoices issued after a certain date. That should prevent any future invoices from getting factored until you are repaid. In theory, you can stop the diversion of A's income from invoices by either:
1) Getting the court to order B and/or C to stop tendering invoices for the judgment debtor company.
2) Getting an assignment order from the court, to order that the income going to A (the judgment debtor), will go to you until the judgment is satisfied; and then serving that order on B and C so that the factoring payment proceeds for any invoices factored by B or C from the judgment debtor company will be paid to you.
Once such an order has been served on them, if B or C (or any of their subsidiaries) disobeys the court order and/or pays or wire transfers money to any accounts owned or controlled by A, they will probably be in contempt of the court order.
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