## Facts

- A Swiss bank extended $350,000 in credit to a New York corporation based on a $350,000 check payable to the bank and signed by the corporation’s president and sole shareholder.
- The corporation maintained an account with the bank that had been overdrawn multiple times; the bank previously required deficits to be cured before extending further credit.
- In March 1984, after the bank warned it would not honor further payment orders until the overdraft was covered, the president delivered the $350,000 check drawn on the corporation’s account at a separate bank.
- The bank relied on the check in extending credit.
- The president admitted that, when he presented the check, he knew there were insufficient funds to cover it, though he claimed he expected funds would be available later.
- The bank alleged facts indicating that the corporation and the president were disposing of or shifting assets in a manner that would make any judgment difficult to collect.

## Issues

1. Whether the bank made a sufficient evidentiary showing for prejudgment attachment under CPLR 6201(3) against the corporation and its controlling individual based on intent to defraud creditors or frustrate judgment enforcement.

## Decision

- The Appellate Division modified the trial court’s order by granting attachment under CPLR 6201(3) against the corporation and the president.
- The order was otherwise affirmed as modified, with costs awarded to the bank payable by those defendants.

## Legal Principles

- CPLR 6201(3) permits attachment where a defendant, with intent to defraud creditors or frustrate enforcement of a judgment, has assigned, disposed of, secreted, or removed property, or is about to do so.
- The requisite intent may be shown through circumstantial evidence and reasonable inferences from the defendant’s conduct.
- Evidence that a controlling individual knowingly tendered a check without sufficient funds, combined with indications of asset dissipation or removal, can support attachment to preserve assets pending judgment.

## Conclusion

The court granted prejudgment attachment against both the corporation and its sole controlling officer because the bank’s evidentiary showing supported an inference of intent to frustrate collection of a potential judgment arising from the $350,000 credit extended in reliance on a knowingly underfunded check.


Societe Generale Alsacienne de Banque, Zurich v. Flemingdon Dev. Corp., 118 A.D.2d 769, 500 N.Y.S.2d 278 (N.Y. App. Div. 2d Dep’t 1986)