Summary of Supplemental Admiralty Rule B Attachment Prepared by: Freehill Hogan & Mahar, LLP

Text of Rule B If a defendant is not found within the district …a verified complaint may contain a prayer for process to attach the defendant’s tangible or intangible personal property - up to the amount sued for - …The court must review the complaint and affidavit, and if the conditions of this Rule B appear to exist, enter an order so stating and authorizing process of attachment.

Requirements for Rule B  Defendant Not Found Within the District  Maritime Claim  Property Within the District  No Bar to the Attachment

Defendant Not Found in District  Depends on answer to two questions Does the defendant do enough business within the district to be subject to the court’s in personam jurisdiction? Does the defendant have an agent for service of process in the district?

Must Have a Maritime Claim  Must have a valid maritime claim against the defendant(s) Attorney’s fees & interest  Claims for indemnity / claims not ripe: may not support an attachment  Claims of alter ego status  Claims of paying agent status

Property Within the District  Broad language – “tangible or intangible”  Electronic Fund Transfers Why Southern District of New York? State law – Winter Storm & Aqua Stoli cases Transfers to or from the defendant Still a hot issue  Letters of Credit

No Statutory Bar  Must ensure there is no bar to pre- judgment attachment of defendant’s assets Example: Foreign Sovereign Immunities Act Contract precluding ancillary relief Foreign litigation or arbitration

No Need Requirement  Some judges had held that there was a “need” requirement to Rule B  Overruled by Aqua Stoli case in 2006

Steps for Obtaining & Serving Rule B Order  Verified complaint & affidavit  Ex parte relief / without notice to defendant  Prima facie showing  Daily service on banks  Notice to defendant after property restrained

Post-Attachment Hearing (Rule E(4)(f))  Defendant entitled to prompt hearing (within 3 days)  Plaintiff bears burden of proof  Prima facie showing / reasonable grounds / probable cause  Review of extraneous evidence  Grounds for challenging

Counter-Security  Admiralty Rule E(2): for limited costs (e.g. bond premium, bank charges)  Admiralty Rule E(7): for counterclaim arising out of the same transaction  Court has discretion  Failure to post after court order