10-3718 U.S. v. Rogan

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Remedies
Garnishment writs

28 U.S.C. 3205 does not allow the government to seize third-party interests recognized by state law.
“The United States relies heavily on Kollintzas. Frank Kollintzas was ordered to pay some $25 million in restitution. He absconded, and the United States obtained a lien against some of his assets, such as pension plans, checking accounts, and the cash surrender value of his life insurance policies. See 18 U.S.C. §3613(c). Frank’s wife Joanna filed for divorce and made a claim to some of Frank’s assets; she contended that the divorce court should determine her share. We held that the right forum is the federal court, which issued the judgment that created the lien, and that the United States had an interest in Frank’s assets senior to Joanna’s. This decision rested on two conclusions: first, that Joanna was making a claim to some of Frank’s assets (rather than, say, to a marital share in jointly owned assets such as a residence); second, that Indiana law would give Joanna’s claim a priority date as of the divorce decree, which came after the lien had been perfected. 501 F.3d at 803. Kollintzas does not help the United States, because the Whitlows are not claiming any of Rogan’s assets. As we have emphasized, what Rogan owned was a membership interest in 410 Montgomery LLC. The Whitlows don’t want any part of that equity interest; their claim is against the LLC’s own assets, in which creditors have entitlements senior to those of equity investors.”

Vacated and Remanded.

10-3718 U.S. v. Rogan

Appeal from the United States District Court for the Northern District of Illinois, Darrah, J., Easterbrook, J.

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