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Nov 06, 2012

New York Court Reaffirms Protections Afforded to Financial Institutions under the “Separate Entity” Rule

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New York’s “separate entity” rule has historically barred judgment creditors from seeking pre-judgment attachment and post-judgment execution on assets located at a bank’s foreign branch, where service was made solely on the bank’s New York branch. The continued viability of that rule in post-judgment garnishment proceedings has been called into question and subject to conflicting rulings since the 2009 New York Court of Appeals decision in Koehler v. Bank of Bermuda. On October 22, 2012, in Ayyash v. Koleilat, the Supreme Court, New York County, ruled in favor of Shearman & Sterling clients in not only reaffirming the continued viability of the separate entity rule but also clearly stating its expansive scope. This note provides an overview of this decision and applicable law.

View full memo, "New York Court Reaffirms Protections Afforded to Financial Institutions under the “Separate Entity” Rule"

Authors and Contributors

Brian H. Polovoy

Partner

Litigation

+1 212 848 4703

+1 212 848 4703

New York

Danforth Newcomb

Of Counsel

Litigation

+1 212 848 4184

+1 212 848 4184

New York

Henry Weisburg

Partner

International Arbitration

+1 212 848 4193

+1 212 848 4193

New York

Practices