On Oct. 23, 2014, the New York Court of Appeals issued an opinion in Motorola Credit Corp. v. Standard Chartered Bank, ___ N.E.3d ___, 2014 WL 5368774, 2014 N.Y. Slip Op. 07199 (N.Y. Oct. 23, 2014), reaffirming New York’s “separate entity rule.” This opinion will impact a judgment-creditor’s ability to restrain assets and collect upon a judgment against a judgment-debtor that has assets located in foreign branches of an international financial institution, even if the financial institution also has a branch located in New York.
Background
This case has a long and winding history. Between April 1998 and September 2000, several members of the Uzan family induced Motorola to loan over $2 billion to a Turkish telecommunications company they controlled and then, unbeknownst to Motorola, diverted a substantial portion of these funds to themselves and entities they controlled. In 2003, the Southern District of New York entered judgment in Motorola’s favor for compensatory damages for approximately $2.1 billion and then entered a subsequent judgment in Motorola’s favor for $1 billion in punitive damages.
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