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Court Orders Debtor to Deposit Assets

In a landmark ruling, a Liechtenstein court has ordered a debtor to deposit certain assets with the court as part of a claim for restitution. The move comes as a major blow to the debtor, who will now be unable to dispose of the seized assets until the matter is resolved.

Background

The court’s decision was made in response to an application by the creditor, who sought to freeze the debtor’s assets and prevent them from being dissipated before the claim could be enforced. The creditor argued that the debt was likely to be endangered if the assets were not seized, citing the risk of the debtor transferring the assets abroad or using them to settle other debts.

Court Decision

The court agreed with the creditor’s arguments and ordered the seizure of specific assets held by the debtor in Liechtenstein. These assets include:

  • Shares
  • Bank deposits
  • Other rights vis-à-vis third parties

Third-Party Debtors Prohibited from Making Payments

As part of the order, the court also prohibited third-party debtors from making any payments to the debtor or taking actions that could jeopardize the effective enforcement of the creditor’s claims. This includes:

  • Banks
  • Asset managers
  • Other entities that may be holding assets on behalf of the debtor

If these third-party debtors fail to comply with the order, they will be liable for damages to the creditor, according to Section 280(2) and (3) of the Enforcement Act.

Costs

The costs associated with the application for a freeze order will be borne by the applicant. The court fees vary depending on the amount in dispute and can reach up to CHF8,500 per application.

Next Steps

Injunctions such as this one are typically made at the cost of the applicant and must be justified by a subsequent or already pending main proceeding. The creditor will now have to initiate a main proceeding within four weeks to justify the existence and upholding of the injunction.

The court’s decision marks a significant victory for creditors seeking to enforce their claims in Liechtenstein, where the legal framework is designed to provide robust protection for debtors. However, it also highlights the importance of careful planning and strategic enforcement to ensure that assets are preserved and available for distribution in the event of a successful claim.