Background
Asset searches are frequently conducted when collecting on a judgment, but they also offer value at the start of the process. When a potential lawsuit hinges, in part, on whether the defendant has assets to make the lawsuit worthwhile, a law firm may request an asset search to make that determination. In one such case, the asset search uncovered some surprises.
The Situation
A law firm representing parties that were injured during a construction accident wanted to know if the companies and individuals at fault had assets to pursue, or if they were “judgment proof.”
A company or individual may be considered judgment proof if it turns out that they have few assets and/or a long list of creditors. A second consideration is the nature of the assets.
If the potential defendant is judgment proof, there is little incentive to file a civil suit, since any monetary judgment would be impossible to collect. The construction industry is rife with lawsuits, liens and judgments; so, while a construction company may appear to be highly successful, looks can be deceiving. The client’s concern was a valid one.
The Findings
The fastest, easiest and least expensive way to conduct an asset search is what the law firm did. The firm’s attorneys conducted limited, database-driven research into the opposing parties. This research may quickly determine if a subject is judgment proof, but the information is limited by how frequently records are updated and where information is obtained. Information can often be incomplete and out of date.
In this case, several red flags suggested that the parties might well be judgment proof, but the law firm wanted to delve deeper to see if the case was worthwhile. The potential payout for their clients was worth the investment.
Integras reviewed the preliminary research and developed a detailed investigative plan to fill in the gaps, which included, among other activities:
- In-person court and property inquiries
- Extensive media and social media research
- Reviews of multiple, independent business information reports
Investigators meticulously collected and analyzed a massive amount of data over a few weeks.
As the law firm’s initial research had shown, these entities had numerous liens and judgments against them, suggesting that they were judgment proof. However, diligent analysis uncovered one signature on one deed. This connection ultimately led to the identification of property holdings worth millions of dollars. This information was not found on any database reports.
The Results
Armed with this information, the law firm decided it was worth pursuing litigation in a situation that preliminary research had shown to be a lost cause.
One signature was a lead which lead us to look further in, and we pieced together everything.
