For years, you have heard your debtor complain about a lawsuit between him and his former business partner. You suspect that the case is nearing a close, and that the debtor may receive a sizeable payout. The debtor tells you that the case is worth nothing and that, after paying his legal fees, he will not receive a penny even if he wins.
Court records can provide a wealth of low-cost or free information about money the debtor may have coming his way. The best place to start is a litigation search in the jurisdictions where the debtor lives or does business. The type of search you need to conduct will depend on your debtor’s location. For example, some courts now make all of their records available online. Other courts have very few online records, so you will need to actually go to the courthouse to find evidence of litigation involving the debtor. Be sure to do a thorough search of federal, bankruptcy, state and local courts to maximize your chances of finding a pending award.
Once you determine where you should search, look for litigation in which the debtor, his businesses or his business partners are named as plaintiffs. Once you retrieve the case file, you will be able to see whether the case was resolved or if it is still ongoing. If the case was resolved by settlement, look for a stipulation of settlement filed with the court. In some cases, the terms of settlement are stated “on the record,” in which case you would need to order the transcript of the proceedings to see what the debtor received.
If the parties settled but did not submit the terms of settlement to the court, then you may only be able to find out how much your debtor received through media searches and interviews. News articles will occasionally give estimates of settlement amounts in high-profile cases. You can find media reports with a simple internet search of the debtor’s name along with the names of the other parties in the lawsuit. If there is no media coverage of the case, try conducting interviews with the debtor’s friends, family or business associates. The temptation to brag about his big payout may have been too strong for your debtor to resist.
If the case resulted in a final judgment, such as a jury verdict or summary judgment in the debtor’s favor, then a record of the final judgment amount will be filed with the court. The final judgment is often not included in the case file, and you will need to conduct a separate search with the clerk of court to find it.
As we wrote here, class action awards are the exception to this rule. Unless your debtor is a named plaintiff, you will not be able to find evidence of the pending award through a litigation search as lists of class action claimants are not public documents. You may only uncover a class action payout through interviews with friends and colleagues or through specific discovery demands.