Wells Fargo Bank, N.A. v. Continuous Control Solutions

Alex Komm, Ilya Markevich, Boris Pusin, Vadim Shapiro, and Dmitry Khots (collectively, the judgment creditors) obtained a judgment against Alex Shcharansky, Lionid Shcharansky, and Slava Staroselsky (collectively, the judgment debtors). To collect on the judgment, the judgment creditors applied for charging orders against the economic interests of three limited-liability companies: Zorass Newco, LLC (Zorass), Global Energy Investments, LLC (Global), and Continuous Control Solutions, LLC (Continuous) (defendants). Zorass was owned by the three judgment debtors; Global and Continuous were both owned in part by Alex Shcharansky. Pursuant to the charging orders, the limited-liability companies would be required to disclose to the judgment creditors their cash-flow statements or other documents to verify that there were no distributions to the judgment debtors. The limited-liability companies filed a limited resistance application in the district court regarding the request for disclosure of cash-flow statements. The district court granted the charging orders against the judgment debtors and required the limited-liability companies to provide the judgment creditors’ counsel or the court a cash-flow statement every six months that outlined disbursals, distributions, inflows, or payments to ensure compliance with the charging orders. The district court later stayed the cash-flow disclosure requirement pending appeal. The limited-liability companies and the judgment debtors appealed, arguing that there was no statutory authority for the cash-flow disclosure ordered by the district court.