On June 18, 2024, Justice Reed of the New York County Commercial Division issued a decision in Dragons 516 Ltd. v. GDC 138 E 50 LLC, 2024 NY Slip Op. 50925(U), holding that a judgment creditor can collect from the recipient of a fraudulent transfer, explaining:
On September 26, 2022, plaintiff served a subpoena duces tecum on 50 Lex, demanding “[a]ny and all” of 50 Lex’s records relating to “any bank account maintained in the name of 50 Lex,” in addition to its assets, liabilities, income, or other means of satisfying the judgment, for a period of time from June 1, 2017 through the date of the notice; and restraining 50 Lex from using funds by which 50 Lex was indebted to GDC.
. . .
50 Lex argues that, by plaintiff’s own admission, 50 Lex has transferred those funds to other entities and therefore lacks possession as contemplated in CPLR 5222. However, 50 Lex may not evade plaintiff’s continuing interest in those funds by repeatedly transferring those funds to other entities, also for no demonstrated consideration. CPLR 5225 (b) furnishes a mechanism for obtaining a money judgment against the recipient of a fraudulent conveyance who has, in the interim, spent or dissipated the property conveyed.
(Internal citations omitted).