Debtors' Rights, Creditors' Remedies and Enforcement of Judgment

Harold B. Auerbach, Prof.

Final Examination, December 1998





1. This is an open book exam. You may refer to any materials you wish.

 2. Total time is two hours.

 3. The exam consists of 3 essay questions.

 4. You are free to allocate your time as you wish.

 5. Each question is worth 50 points.

 6. Answer each question in a blue book (not necessarily a separate blue book for each).

 7. Try to write legibly. If I can't read it, I can't count it.

 8. Put your exam number on each blue book and on the exam questions.

 9. Please turn in all questions, scratch paper and blue books at the conclusion of the exam.

 

 

 

 

 

Debtors' Rights, Creditors' Remedies and Enforcement of Judgment

Harold B. Auerbach, Prof.

Final Examination, December 1998

1. Due to your lawyering skills, you have convinced a jury that your client, Honest Bank, has been defrauded by Slimy Debtor, and you have obtained judgment against Slimy for $500,000, which includes $150,000 damages and $350,000 punitive damages. Immediately after congratulating you on your great victory, your dent wants to know:" So, where is my money?". Among the documents in your client's file is a credit application from Slimy which lists the following assets (your client believes that these assets really exist, or existed when the application was made, but that the values shown for them may be excessive):

a. A checking account with Honest Bank in the name of Slimy and his spouse Innocencia with a balance of $25,000.00;

b. A savings account in another bank in the name of Innocencia in the sum of $20,000.00;

c. A 1995 Lincoln Continental Automobile valued at $35,000.00 on which $30, 000.00 is shown as still owed to the car dealer;

d. Shares of stock in representing 45% of the corporate stock of Debtor's Haven, Inc., an out-of state family-owned corporation by which        Slimy is employed, valued at $100,000.00;

e. Wages from Debtor's Haven, Inc. at $4,000.00 per month;f. The family home, standing in the name of Slimy and Innocencia as joint tenants, valued at $750,000, with a first deed of trust against it for $400,000, and a second deed of trust against it for $200,000; and

g. An uncollected judgment in favor of Slimy and against Hapless Harry for $200,000.

What can you do: 1) To enforce your client's judgment against Slimy? 2) To determine whether Slimy still has these assets or any other assets which might be looked to for satisfaction of your judgment? 3) To determine the approximate value of any such remaining or additional assets?

2. The facts are the same as above, except this time you are not the attorney for the Bank. You are now Slimy's attorney. What can you advise Slimy to do to protect his assets from enforcement of the Bank's judgment.

3. Still the same facts.  This time you are again the attorney for Honest Bank.  After you have done whatever you recommended in your answer to question No. 2, Slimy file Chapter 7 Bankruptcy.  What, it anything, can you do now to protect your client's interests?