Meaning
Provisional judicial decrees restrict a party from moving or disposing of assets pending the final resolution of a claim. Courts issue these directives to ensure that a debtor does not empty their bank accounts before a trial ends. The duration of interim freezing orders is typically short, lasting only until a full hearing can be held.
Protective Injunction
Successful applicants must show that a high risk exists that the defendant will hide the assets elsewhere. During the period covered by interim freezing orders, the targeted company can usually continue its daily business such as paying wages or rent. However, it cannot sell off major pieces of equipment or send large sums to offshore branches without permission from the bench.
Discovery Pressure
Banks receive copies of these notices to ensure they do not facilitate a violation of the restrictions. The existence of interim freezing orders forces a level of financial transparency early in a legal fight. Litigants who ignore these decrees face severe consequences such as imprisonment for corporate officers or a total ban on their legal defense.
This preserves the status quo while the judge takes time to weigh the evidence from both sides.
Asset Cap
Orders usually target a specific dollar amount. Values held above that limit remain free for the owner to use at will.
