Over the past few months, the Netflix docuseries Tiger King has been must-see television for many people. When you watch the series, you see why, as it is full of interesting characters and compelling story lines. While at times it seems like it must be fiction, the fact is that the “Tiger King” story continues on even today. As an attorney, there was an interesting development a couple of weeks ago that highlights some lesser-known, but important, aspects of litigation.
As those who have seen the show know, Carole Baskin and her group, Big Cat Rescue Corp., have actively pursued litigation against the “Tiger King,” Joe Exotic and his zoo. Baskin eventually won her case against Joe Exotic and got a judgment against him. In the process, he transferred the zoo to his mother and a new business entity. Baskin later filed suit against the mother and new zoo entity. To make a long story short, the zoo’s attorney withdrew from the case, and the zoo was given 30 days to find a new lawyer. After the 30-day period and additional warnings, the Oklahoma federal court entered default judgment against the zoo.
When a judgment is entered against a party, the “winning” side then needs to collect the judgment. Many times, this does not involve the “losing” party simply writing a check. The judgment creditor (“winning” party) can place liens on property owned by the judgment debtor (“losing” party). To avoid having a lien placed on his zoo, Joe Exotic transferred it to his mother and other business entity. Generally, the law says that property cannot be transferred simply to avoid actions from judgment creditors. This is a so-called “fraudulent conveyance” or transfer. The Court found that this was a fraudulent conveyance.
The fraudulent conveyance voids the title of the owners to whom the zoo property was conveyed. As such, Carole Baskin’s Big Cat Rescue was granted a constructive trust over the zoo and its property from and after February 20, 2015. A “constructive trust” is an equitable remedy that a court will impose to restore a party that had been wrongfully deprived of its rights. Because of the constructive trust, the zoo “owners” have no right to use or possess any of the zoo property. The judge gave them 120 days to completely vacate the property to be turned over to Big Cat Rescue.
While this arises in the context of an almost larger-than-life television series, the reality of fraudulent conveyances is something that attorneys deal with in their practices. It is often a concern before litigation even arises. That is why a party initiating suit may seek preliminary injunctive relief from the court to ensure that a defending party does not dissipate or transfer any of its assets. This is probably not the last of the Tiger King drama, but, for now, it has provided a good illustration of the fraudulent conveyance and the constructive trust.