In 1993, Lee Koehler was awarded $2,096,343 against his former business partner, A. David Dodwell.
After registering the judgment in the United States District Court for the Southern District of New York, Koehler sued the Bank of Bermuda (New York) Ltd., a New York subsidiary of the Bank of Bermuda (BBL), which was holding Dodwell's stock certificates as collateral for a loan.
BBL refused to release the certificates because it believed that service upon its New York subsidiary didn't subject BBL to the court's jurisdiction.
In 2004, it was discovered that BBL no longer had possession of the shares because the bank had transferred the shares to another Bermudan company (about a decade prior).
In response to a question posed by the United States Court of Appeals for the Second Circuit, our state's highest court determined that a New York court can order a third party (over which it has jurisdiction) to produce assets belonging to a judgment debtor.
Relying upon state law -- New York's Civil Practice Law Rules -- the New York State Court of Appeals concluded that the court's power even extended to assets situated outside of the state.
BBL better take stock in that.
To view a copy of the Court of Appeals's decision, please use this link: Koehler v. Bank of Bermuda Limited