How Worldwide Asset Freezing Orders Are Reshaping Yacht Deals

Money now moves at the speed of a click, but the law is racing to catch up. We dive into the rise of worldwide freezing orders—born from the English Mareva injunction—and explore how a judge in one country can halt assets across borders, reshaping how major deals get done. From the chaotic rush of Russian privatization to Bill Browder’s campaign and the Magnitsky framework, we connect the dots between private remedies, public sanctions, and the new reality facing owners, buyers, banks, and brokers.

We break down the legal tests courts use—good arguable case, real risk of dissipation, and proportionality—and why most freezes are granted ex parte to prevent “hit send” asset flight. Then we turn to the real‑world fallout: yacht sales paused at the dock, liens colliding with clean‑looking titles, and the buyer’s nightmare where a $75M vessel becomes an “unlawfully dissipated asset.” Along the way, we examine sanctions lists across the U.S., U.K., and EU, how mismatches create compliance traps, and why service providers risk contempt if they facilitate transfers after notice.

We also tackle due process head‑on, contrasting constitutional concerns about pre‑judgment takings with maritime exceptions designed for assets that can simply sail away. The Phi yacht saga highlights how geopolitics and perception can shape enforcement even without a formal sanctions designation. Throughout, we share practical safeguards: multi‑jurisdiction sanctions checks at signing and pre‑funding, robust KYC and UBO verification, independent title reviews and flag‑state searches, escrow structures with clawbacks, and covenants that permit rapid exit if freezes hit mid‑deal.

If you navigate high‑value transactions—especially movable assets like yachts—this conversation offers clarity and concrete steps to reduce risk while the legal landscape evolves. Subscribe, share with a colleague who handles complex closings, and leave a review with the one question you want us to tackle next.

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Transcript

Setting The Stage: Why This Matters

Diane M. Byrne 0:41

Welcome everybody. Michael, once again, we have a super impactful topic. And I think it's one that definitely impacts not just the owners, but potential buyers as well. And everybody who is surrounding them in terms of their advisors, lawyers, financial advisors, brokers, yacht managers, you name it. This is a subject that it seems like is making the rounds. I've seen a couple of articles pop up. Or is there's something really going on? What what's your perspective?

Privatization, Oligarchs, And Bill Browder

From Magnitsky To Freezing Orders

Michael Moore 1:25

It's basically something that's coming out of a confluence of efforts by lawyers worldwide to change the dynamic, the leveling of the playing field. I think it all starts back in 1989 or thereabouts. Someone came up with something that set the legal world on fire, and it had the word Mariva in it, M-A-R-E-V-A. It was a maritime case, and they got what is called a Mariva injunction, which really was an effort to extend the jurisdictional reach of the court. There were a lot of things going on at once in that period leading up to 1989 and the 10 years before that. The electronic transfer of assets was a big issue. Normally, when you got an order freezing something, the person holding the asset had to be holding it at that moment. If the order came in 10 minutes late, it was too late to freeze anything. So there was a lot of discussion as to whether these orders were effective. In 1989, when the Berlin Wall fell, it was literally the beginning of the collapse of the USSR. It was the realization that communism was not working and that capitalism was the alternative. It seemed to be the way things were going to start going in the USSR as they tried to privatize their economy. The government was flailing away trying to figure out how to do this, how to take everything that had formerly been owned by the government, and then in a flash, in a desperation effort to save the country, to allow people to own a piece of the country that was formerly owned by the state. A guy that played a very important role in all of this is a fellow named Bill Browder. If you really have the time, he's written two books. One was called Red Notice, and the other was entitled Freezing Order. Bill Browder is now, I think he's in his 60s and has become more of an anti-corruption advocate and an activist for a lot of things. But to understand worldwide asset freezing orders, there would be no better place to start than Bill Browder's life story. When he started out, he was a young Turk at Solomon Brothers and was assigned to go to Russia to look into a fishing fleet. Bill Browder, being a bright guy, by the way, his grandfather was head of the Communist Party of the United States of America, which made it interesting since he is with Solomon Brothers, the sort of citadel of capitalism in America. But like many kids, he kind of just moved away from what his family did, which was advocate for ideas that he didn't accept that were now falling apart. So now he's in Russia. And he comes to realize he can buy them for two and a half million. So you don't have to be a rocket scientist or Warren Buffett to figure out this is an opportunity. Now he moves to Moscow, not before Solomon Brothers has recognized that he is onto something big time. But at the same time, they're risk-adverse, they don't want to screw up, they have all these concerns, they've never thought about Russia before as an investment opportunity. Bill Broder ends up going to Moscow and hooks up with a guy named John Linquist who starts the Boston Consulting Group. So Broder is now looking into this sea change that's occurring and hooks up with another legendary conservative investor, Edmund Safra. A guy that dies in a fire in Monaco a few years ago under very mysterious circumstances. But Uber billionaire hooks up with Bill Broider. And, you know, they're off to the racist, this Lebanese billionaire, this kid from America, former communist family, one of the leading communist families in America. And they're now involved in a full frontal assault on the privatization of Russia. Things could not have gone more screwed up if he had written the textbook. Because initially, one of the first things that Bill Broder found out, this is how we'll get to worldwide asset freezing orders, is he comes to realize that Gazprom, Gazprom was supposed to be a not-for-profit company, is now being sold off by a bunch of people that are making about 30 bucks a month, and they're all now beginning to be paid off. You know, they can sit there and make 30 bucks a month, or they'll take these major payments from people that had some money in order to get these pieces of paper. They gave them a piece of the company. These are the so-called vouchers. The so-called oligarchs are now buying. There's like 22 principal oligarchs. It's a feeding frenzy. They're all buying in, they're paying off the government people that are trying to manage this voucher system, literally distributing the entire assets and the entire Russian economy. And Broder, meanwhile, is an advocate for a more orderly market so that his clients can make money. And he starts naming and shaming people that he knows are bribing the government officials. And much to his delight, a guy named Kordakovsky gets arrested. Now he thinks, wow, this is great. This Putin guy is totally serious. He has arrested this fellow, Mikhail Kordokovsky, and put him in a cage, like a zoo cage, and put him on trial. And of course the result is preordained. But now it's Putin's turn to shift the entire plan. And that is Putin is now saying, I'm gonna take half of everything you think you've just earned, and I will then become the richest man in Russia, certainly maybe one of the richest men in the world. By 2005, Broder was such a pain in the butt for Putin, he's expelled from Russia. Now, meanwhile, he has already managed through his clients to make quite a bit of money. Broeder's now sitting in London. He's an American, but he's now become an English subject. He goes into full frontal assault with a lawyer named Sergei Magnitsky, who has stayed back in Russia and gets arrested for nothing. Basically trying to uncover corruption. And for his troubles, about a year later, 360 days later, he's murdered in jail. Yeah, that gave rise to the Magnitsky Act. Now, the Magnitsky Act is all about assets that are wrongfully obtained through corruption, and so on and so forth. And that leads to things like these so-called Mareva injunctions, are now being generically called worldwide freezing orders. It's mostly the courts of the United Kingdom with other courts around the world that have adopted the common law system.

Speaker 1 10:13

Okay. So these worldwide freezing orders, whether it's issued in Dubai, England, et cetera, it does apply globally. It's not just limited to their country.

Michael Moore 10:28

So starting off, the starting point is that only English courts were doing it. And then the courts that follow the English courts, which was Dubai and Abu Dhabi. Now, but there's always been this thing called comity, where one court system can recognize a court system in another jurisdiction. So that was not new. You receive a judgment entered in England. Will you recognize it? And that gave rise to kind of an analysis of what did lead to this ruling, the so-called worldwide preasing order. Because immediately it doesn't look right. It's an English court, it's only got jurisdiction in England. And now we know Abu Dhabi and Dubai, but it has no jurisdiction, for example, in Florida. So when the courts look at it, for example, in Florida, I know I have a worldwide preasing order in one of the cases we're handling, comes strictly out of an English lawsuit. But if you try to challenge it, you've got to show good arguable case. There's a real risk of dissipation of assets. And it just seems not unduly oppressive, at least for a period of time, to hold the assets. These things are not forever, but they start out being just maintain the status quo.

Speaker 1 11:58

Okay.

Risk Tests And Status Quo Freezes

Michael Moore 11:59

So, yeah, that's a big deal because the courts do not like prejudgment writs of attachment or prejudgment takings. For example, when you grab a yacht, something that most people know about, you can grab a yacht. How can you do that? Well, that's an exception to the Constitution. Given the exigent circumstances of the nature of the boat, the boat leaves. If you don't grab it, it leaves. It's called the exigent circumstances. Almost all of these orders are ex parte. No one gets notice because if you give people notice, they're going to get rid of the assets. Yet you tell a boat you're going to arrest it at least poor. So these are things that are evolving. But I think the the natural, maybe the unnatural stepchild of this whole thing is these global designated persons who are on these sanctions list. It's almost like a global overnight ruling that allows for assets to be seized without due process. If you're on that list in the UK or the EU or the U.S. of A, there's three basic lists. Your assets can be frozen until further notice, and third parties can't do business with you. So that's effectively the sort of public side of worldwide asset freezing orders. Those assets of all those oligarchs worldwide were frozen. That's 22 people, but that's a at least 45 or 50 percent of the Russian economy.

Speaker 1 13:40

Right.

Michael Moore 13:41

As opposed to a private action, which is what we're now starting to see more of.

Yachts, Ex Parte Orders, And Seizures

Speaker 1 13:44

Right. Okay. And then in terms of the sanctions, obviously people can land on the sanctions list who are not Russian and do land on these sanctions lists for any variety of different illicit behavior, questionable behavior, perhaps if it hasn't yet been litigated in court, but the government feels it has enough information to block this person from having use of their assets. So then how is this impacting the phrase I've seen as is the unlawful dissipation of assets? Which it is a little confusing to me because from what I've read, dissipation of assets seems to imply an effort by someone to either sell or otherwise dispose of, maybe even squander an asset purposely to prevent a third party from taking it or benefiting from the financial the financial aspect of it. A yacht sale, they don't want the person to benefit from the monetary sale. So how is that definition of dissipation of assets different from the unlawful dissipation of assets? Or am I misunderstanding?

Sanctions Lists And Public Freezes

Michael Moore 15:04

I think that there is a lot of this sort of unclear. You receive something, it's got bells and whistles on it, it looks like it's uh real, it comes out of the High Court of England. It's got all the right words, and and then it's usually accompanied by a letter from a law firm in England saying all kinds of horrible things are going to happen to you if you don't stop the dissipation of assets by the defendant in their case. So they've already gone through a process, usually an ex parte process, but they have obtained this order. Some judges looked at it. Is it fair? Is it reasonable? Is it limited? If he's a billionaire and you're only looking at the freeze five million, okay, it's limited. But now you have a problem, you have a high-class problem because you're sitting, you know, in your office in the Miami or wherever, and do you or do you not adhere to this or follow this ruling? And the answer is most lawyers would tell their clients, until further notice, don't you know, even if your client receives assets in consideration of something, it's arguable they'd have to give those assets back if some court later looks at it and says you violated this rule-wide asset freezing order. So there's a lot of uncertainty in the marketplace today, but the rapid transfer of assets, the digital transfers, everything's by wire these days. I mean, a lot of businesses aren't even accepting cash or checks anymore. They want to see wire electronic transfers. But you are taking a risk if you don't see clarification. I think that probably the one way to do that would be to go into court and get a counter order that says the court doesn't recognize this order obtained in the U.K. And God bless everybody. Hope you do well, but we're not going to enforce it. It is a taking without due process, but it's something you're seeing, as I said before, it's not theoretical to our office. We have one matter, but it's one significant matter that came up in London. The order was obtained in London. We have to now make a decision, the client does, it's will he enter into a settlement agreement with the bad guy? Let's call him the bad guy, because we're the good guys and they're the bad guys. But if you enter into a settlement agreement with the bad guy, and some court later says, no, no, you were subject to that worldwide asset freezing order, then in theory the client would have to give back whatever it received and maybe have no chance of getting in return what he gave up. So there's always that kind of yin-yang quid pro quo, this for that. And that's something I think we're going to see more of. I think the world's simply a smaller place. This is just the natural consequence of that. In fact, I don't really have a lot of specifics on it, but I am aware that there is some kind of a treaty coming down the street as we speak that will address this whole thing of worldwide asset freezing orders.

Private Actions And Market Uncertainty

Speaker 1 18:15

So let's say there is a yacht owner who decides to sell their yacht, as is always the case. Someone else decides they want that yacht, the person who is selling is not yet subject to a worldwide freezing order. They come to an agreement, say the freezing order goes into effect while the agreement is underway. Naturally, the buyer and their advisors are not going to be checking the Office of Foreign Asset Control and all of the other jurisdictions around the world to see if this person is sanctioned. The transaction goes through, the person buys the yacht, they're cruising, they're enjoying their life. So they've been using the yacht, they paid for maintenance, they've paid for crew, etc. They're now told you don't own this. This is an unlawfully transferred asset, dissipated asset. We're gonna take it from you. They just paid, I'm gonna pull the number out of the air, $75 million for their yacht. They have no recourse, it sounds like, to get their money back.

Dissipation Vs Unlawful Dissipation

Michael Moore 19:32

This is a very scary scenario that not just this is almost certainly will happen. It's not just a hypothetical. And the bank's view is that they had a lien on a boat, but the guy that bought the boat, his view is, well, I checked out the title, there was no lien on the title. But the simple truth is that one of the titles is fraudulent. So the question is, are you gonna take the boat from the guy down in the crew been living out his dreams on his boat that he just bought? Are you gonna acknowledge the bank's first preferred ship mortgage? And, you know, it all depends on the facts. That would be an example. More common scenario, quite frankly, is divorce, where the husband, usually the husband, I'm just saying from experience, hope it's changing. But the reality is the client goes to the door, comes to the door and wants to get rid of assets, literally wants to dispose of assets and wants our participation in that. And we just, in our case, we said, no, we won't do that because there are court orders that prevent you from doing that. But all of these things are jurisdictional or knowledge. At least you have knowledge. Sometimes it's not clear that it's jurisdictional. We have a situation where boats were brought in, want to transfer the boats to an offshore flag. We won't do it because we were aware of a judgment that had been entered against the record owner of the assets. Lots of arguments back and forth, a lot of yelling and screaming. Reality is you're not going to do it, and you're also not going to do it for your client's ultimate best interest because he could go to jail over violating a court order. You would be you know be held in contempt, subject to sanctions, all kinds of horrible things can happen. But the thing that's happening now that's so different, and it's in some way linked up to Putin's invasion of Ukraine, they gave rise to these three website-based where you could literally go look at the name, is the name on the website. They didn't work together very effectively, I found that you'd have to check all three European Union, United Kingdom, and the U.S. of A. And the US of A doesn't care if you're on the EU and the U.K. list, or if you're not on the list. All they care about, I think they have their arms full, is are you on our list? But let me tell you, if you don't adhere to that list, the full weight of the American government, which is a heavy hammer, would come down on you. And I think it's all the same kind of thing. Basically, what the court is saying to the defendant in those cases, don't dissipate assets, but also going up. Further, if you receive this order, you're on notice of this worldwide asset freezing order, and you cannot help this guy, defendant in this case, dissipate assets. So you're a bit of a bind. You can't tell your client, look, I can guarantee you you will not have any problems in the future. No, you can't do that. You got to say, look, let me tell you about what we know, and then you'll have to make that call.

Speaker 1 23:10

Right.

Michael Moore 23:10

I think it's that's the way it works. I mean, the lawyers don't make the judgment call, but they they they try to advise their clients who may try to get them to guarantee the future. You know, you get a lot of these people that you don't really know who they are. You know, can you really be buying a uh $25 million motor yacht and have no trail on the internet? Generally these days, you're gonna have a bit of a trail. It's gonna be a KYC trail. Here's how they made their money, here's where they live, you know, here are names they go by. And almost all of the jurisdictions these days are getting into that, all the flag states and so forth.

Practical Dilemmas For Advisors

Speaker 1 23:51

Right. So I'm wondering if this is somewhat related to what's going on with the Montereyad phi or phi, depending upon who you speak to, which way to pronounce it. Exactly. That case has had me shaking my head all along because he was never on a sanctions list. But he's now appealing to, and forgive me everyone, I'm going to get this wrong, but it's an international humane court. I I I know I didn't get the the name correct, but it's a it's an international body outside of England. He's appealed it as far as he can go within England, and he's lost at every stage, unfortunately for him. So that's why he's now doing his last uh his last potential recourse.

Michael Moore 24:37

Right.

Speaker 1 24:38

And I I just still shake my head over that case because he was never on a sanctions list, he was never accused of wrongdoing, and the government's argument, which the court said, yes, we understand this is what the argument was, and we have no problem with it, was he's Russian, he's a very wealthy, successful Russian. He could not have made his money as such without some tie to Putin directly or indirectly, therefore, the odd is ill-gotten gains.

Michael Moore 25:12

It's crazy. I mean, I have read everything, and I could be wrong because you don't have the total knowledge, but every article that's been published that's come across my desk, every bit of news feed that's come to my attention, the various articles that get in the what they call the advanced sheets. I've yet to see one that persuades me that the taking of that vessel was proper. And I think the jury's, quote unquote, is still out on that one. I mean, I think that it's he's got this guy's grimly determined, God bless him, to show. And by the way, I mean, just if I may just editorialize the links for a minute for our audience, if you go on the internet, you'll see 50 articles by the 50 biggest law firms in the world. Well, at the end of the day, lawyers are lawyers. I mean, they're just people that graduate law school. They may have graduated dead last in their class from the worst law school in the world, but if they pass the bar, they're lawyers.

Speaker 1 26:22

Right?

The Buyer’s Nightmare Scenario

Michael Moore 26:23

So you don't really know at the end of the day, you're getting a lawyer. And a lot of times these cases that are lost, I've read some of the articles written, they don't have a click. What they did was, I can only imagine was just they're rushing to get something out. So the internet will pick it up if you need that kind of service. You've been served with a worldwide freezing order. They're basically efforts to gin up business. It's just that simple. I'm not putting them all down because some of them were outstanding. We started this podcast by saying if you want to understand worldwide freezing orders, Bill Broder would be a good place to start. But I mean, no one really has the answer to all of your questions or to what the podcast is trying to convey, except kind of a starting point. But I can tell you the law is always that way. It's always the tail end of the arrow of progress. If only they keep that arrow under control. You raise a very good example. I don't know of a better example. Phi. I think of it as Delta Phi or Phi Delta Kappa, the way we were pronounced it. Some people have said phi. I totally accept that. But that guy, he is fighting the good fight. And there's a lot of people pulling for him because you shouldn't just lose your assets because of your surname.

Speaker 1 27:50

Sure. Right.

Michael Moore 27:51

I think there's, I don't see in the popular press, you know, just a lot of evidence that this man has in any way done anything wrong. But that's just not the way it's supposed to work. You know, you're supposed to have due process. These are all sacred ideas. So that's kind of where we are. I think the worldwide asset freezing order is pretty close to uh uh going in the right direction because you actually do have a hearing. You do actually do have a judge, and the judge sits there and does understand he's got an ex parte, which meaning unilateral submission. The other guy is not in the room. And he understands why he's not in the room. Uh he will dissipate assets the moment he knows there's an effort to stop dissipation, he's gonna dissipate. He's gonna send it. All he's got to do these days, hit send. Or hit his banker. Hit send now. You know, I may make one phone call. You tell them electronically, then they pick it up. Is this really you? Yes. Boom, they send. And they're good to go. They go, no, it's not my money. I'm holding this money for this guy.

Speaker 1 28:51

Right.

Divorce, Flags, And KYC Realities

Michael Moore 28:52

So it's it's a very, very interesting problem. It's the nuclear option for the plaintiff's lawyer. You are taking people's property without due process. It's a pre-judgment writ of attachment. Fuentus v. Chevin was the Supreme Court case that addressed pre-judgment takings. Basically, it says you have to have a due process hearing before you can take people's property. And then the exceptions came, which are maritime law. Why? Because boats leave. That's the dissipation of an asset. It disappears over the horizon. The moment it knows you're after them, it's gone. And courts understand that. And they basically say, okay, you can arrest the boat, but we have to have what is called a prompt post-seizure hearing to see if you do it in the right way. And you're guaranteed that prompt post-seizure hearing. Well, if the money flows, it's you're done. I mean, there's no way to get it back. It's just gone.

Speaker 1 29:53

Right, right.

Michael Moore 29:55

And so you're pretty well screwed. It's probably going to go offshore, then another offshore, another offshore, another offshore. Ultimately, you're just not going to catch up with it. Well, these are That's what we're up against, I think these are fascinating to watch.

Speaker 1 30:09

They will be more fascinating to continue to watch and see how the courts rule as the coming months and years continue to unfold. And if there's some consistency that starts to evolve, I think that will also be very helpful for all of us. Perhaps we could do some follow-ups. Thank you everybody for listening. We we appreciate you sending in your questions and continuing to be our listeners. If you have a question that we have not addressed or a topic that we have not addressed, you can contact us through the show notes. Our emails are listed at the bottom of each episode. Until next time, I'm Diane Vern. Michael, I'll give you the last word.

Michael Moore 30:52

Thank you, Diane. It's always a pleasure. Today was a particularly wonderful pleasure. Today was a good one.

Speaker 1 30:58

Thanks, everybody.