Arizona law gives Judgment Creditors a remedy to aid in the collection of a judgment when the Judgment Debtor holds stock. The Judgment Creditor can ask the court to enter an order in aid of collection and authorize the execution upon stock interests of Judgment Debtor.
In accordance with A.R.S. § 47-8112(E) and § 12-1559(5), the Judgment Creditor applies for an injunction and order to aid in the collection of, and the execution upon, stock certificates. The Judgment Creditor can enjoin the Judgment Debtor from hiding or transferring the stock certificates that so that the certificates can be seized.
In the Application the Judgment Creditor must allege it holds a money judgment against Judgment Debtor that has not been satisfied, and that the Judgment Debtor refused to satisfy the Judgment upon demand. The Judgment Creditor will then establish for the court the stock interests at issue and the remaining amounts owing on the Judgment. Once these items are established, the Judgment Creditor is entitled to supplementary relief in aid of collection of the judgment.
A.R.S. § 12-1559(5) provides that to execute upon the stock of a corporation, the Judgment Creditor shall follow the procedure set forth in A.R.S. § 47-8112. The procedure set forth in A.R.S. § 47-8112 requires the creditor to establish the Judgment Debtor owns stock, and the Judgment Creditor is seeking to execute upon that stock to satisfy the judgment. To help the Judgment Creditors, A.R.S. § 47-8112(E) provides for injunctive relief:
- A creditor whose debtor is the owner of a certificated security, uncertificated security or security entitlement is entitled to aid from a court of competent jurisdiction, by injunction or otherwise, in reaching the certificated security, uncertificated security or security entitlement or in satisfying the claim by means allowed at law or in equity in regard to property that cannot readily be reached by other legal process. (emphasis added).
Judgment Creditor is entitled to an injunction, pursuant to A.R.S. § 47-8112(E), to prevent Judgment Debtor from hiding or transferring his stock certificates, or from otherwise interfering with Judgment Creditors’ legal rights to attach the certificates. Under the same statute, Judgment Creditor is also entitled to an order of the court that requires Judgment Debtor to deliver the stock certificates to counsel for the Judgment Creditor. Finally, Judgment Creditor is entitled to an order that requires Judgment Debtor, to turn over any of Judgment Debtor’s stock certificates, or uncertificated interests.
Arizona law provides the mechanism and authority for a Court to order an injunction and require the Judgment Debtor to deliver the stock to Judgment Creditor’s attorney. This is a valuable tool for a Judgment Creditor.
The attorneys at Windtberg & Zdancewicz, PLC provide clients with experienced legal representation in all litigation and bankruptcy matters. We are experienced in creditor’s rights prosecuting and defending garnishments, charging orders, attachment, property execution, trustee’s sales, foreclosures, judgments, judgment collection, domestication of foreign judgments, and creditor’s issues in bankruptcy cases. If you need assistance with your collection matters, please contact us at (480) 584-5660.