## Facts

- Three foreign banks purchased approximately $200 million of first-series debentures issued by a Russian bank and guaranteed by an affiliated entity.
- The debentures bore a fixed interest rate payable semiannually, matured in 2000, and included New York choice-of-law and New York forum-selection provisions for default-related litigation.
- After the 1998 Russian financial crisis, the issuer defaulted on an interest payment; the banks accelerated the debt and sued in New York for roughly $30 million in damages.
- Alongside contract claims for payment on the debentures, the banks alleged the issuer was insolvent and owed creditors a fiduciary duty to preserve assets, which it breached by transferring key assets (branch network and clientele) to another bank.
- The banks sought provisional relief, including an attachment and a preliminary injunction barring further transfers or dissipation of assets and barring steps furthering the transaction with the other bank.
- The trial court granted both an attachment and a preliminary injunction; the Appellate Division affirmed the injunction and certified a question to the Court of Appeals on whether CPLR 6301 permitted such injunctive relief in an action essentially for money damages.

## Issues

1. Whether a general unsecured creditor pursuing primarily money damages may obtain a preliminary injunction under CPLR 6301 freezing a debtor’s assets before judgment to secure potential collection.
2. Whether allegations that an insolvent debtor owes creditors a fiduciary duty to preserve assets, coupled with a request for permanent injunctive relief, supply an independent right sufficient to support a CPLR 6301 preliminary injunction.

## Decision

- The Court of Appeals reversed the order affirming the preliminary injunction and answered the certified question in the negative.
- It held that CPLR 6301 does not authorize a preliminary injunction freezing a debtor’s general assets when the action’s substance is recovery of money damages by an unsecured creditor.
- The court rejected the attempt to recast the case as equitable based on insolvency-based fiduciary-duty allegations; the asserted duty was treated as collateral to the collection goal.
- The preliminary injunction was vacated; the ruling addressed injunctive relief, not the separate statutory attachment remedy.

## Legal Principles

- A general unsecured creditor may not restrain a debtor’s use or disposition of general assets before obtaining a judgment, where the restraint’s purpose is to secure satisfaction of a prospective money judgment.
- CPLR 6301 limits preliminary injunctions to situations protecting an independent substantive right; it is not a device for prejudgment asset freezes in ordinary money-damages actions.
- Pleading an insolvency-based fiduciary duty to preserve assets, and requesting permanent injunctive relief, does not transform a debt-collection claim into one supporting a CPLR 6301 preliminary injunction absent an independent property or equitable interest.
- Any expansion of prejudgment asset-freeze authority in money actions is a legislative choice, not a judicial re-interpretation of CPLR 6301.

## Conclusion

The court held that unsecured creditors suing for payment on debt instruments cannot use CPLR 6301 to obtain a prejudgment injunction freezing a debtor’s general assets to protect anticipated collection; without an independent substantive right beyond the money claim, such injunctive relief is unavailable.


Credit Agricole Indosuez v. Rossiyskiy Kredit Bank, 94 N.Y.2d 541 (N.Y. 2000)