Limiting Koehler

Author: | Published: 2 Mar 2011

The law of enforcement of judgments is very much in flux in New York. The New York Court of Appeals decision Koehler v. Bank of Bermuda provides judgment creditors with significant ammunition to go after assets located outside the US, and the New York branches of the foreign banks clearly are in the crosshairs.

But a number of arguments can be and have been raised in response to Koehler that have persuasive value, both practically and intellectually.

In the summer of 2009, New York's highest court issued a decision that sent shockwaves through the entire banking community, especially foreign banks with branches or affiliates in New York.

In Koehler, a sharply divided New York Court of Appeals stated that the New York statute governing the enforcement of money judgments contained no express territorial limitation barring the entry of a turnover order that "requires a garnishee to transfer money or property...