In my post regarding Judge Alito and the Vanguard recusal question, I inferred from the events described in the federal opinion (which I reprinted in part to allow readers to make their own assessment) that a state court had ordered that funds in the relevant Vanguard accounts be dispersed to creditors based on a finding that the funds had been placed in the account by plaintiff’s late husband, Mr. Monga, to avoid the claims of those creditors. In a letter to me (posted here on December 30), Ms. Maharaj states that no such finding was made.
After receiving her letter, I have looked into the matter further and determined that Ms. Maharaj is right. My inference, though I believe it was reasonable, was mistaken.
Here is a brief explanation. My inference was informed not only by the federal opinion I reprinted, but by other opinions I reviewed to gain perspective on that opinion. Taken together, the published opinions on this matter state that Massachusetts courts found Mr. Monga commingled and fraudulently transferred assets, that such transfers violated court orders (i.e., an asset freeze order or orders), that these events caused (or occurred in rough proximity to) the appointment of a receiver, who persuaded the court to extend the asset freeze orders to Mr. Monga's Vanguard accounts. The record also states that, after such extension, the court ordered that the funds in those accounts be paid over to the receiver, and then to creditors, and that the funds were in fact disposed of in this manner. My inference reflected what I believed was the most probable explanation for this sequence of events.
As Ms. Maharaj states, however, what I saw as the most probable explanation turns out not to have been what happened. As I now understand the matter, the sequence of events regarding the Vanguard accounts is as follows: (i) litigation between Mr. Monga and a business associate produced a judgment adverse to Mr. Monga; (ii) a Massachusetts court issued an order freezing certain assets in order to satisfy that judgment; (iii) disputes over asset transfers arose; (iv) a receiver was appointed for the businesses involved in the litigation, and charged with collecting assets; (v) the receiver asserted that judgment creditors had a claim to Mr. Monga's Vanguard accounts; (vi) the court extended the asset freeze order to those accounts; (vii) the parties litigated the receiver's claim and, in the course of this litigation, the court found that Mr. Monga violated certain discovery (or discovery-related) orders; (viii) as a sanction for such violations, the court refused to allow Mr. Monga (and/or Ms. Maharaj) to dispute the receiver's assertion that the Vanguard funds rightly belonged to judgment creditors; (ix) the court therefore ordered that the Vanguard funds be paid to the receiver, and then to creditors, not on the basis of an evidentiary finding that the funds had been fraudulently transferred, but on the basis of a finding that Mr. Monga had lost his right to contest the receiver's assertion that the funds had been fraudulently transferred; (x) Ms. Maharaj believes the receiver's basis for claiming the funds was insubstantial, but she has been prevented from litigating this claim by reason of the orders mentioned above.
As I say, though I believe my inference was reasonable, it was mistaken. I regret the mistake: My apologies to readers generally, and to Ms. Maharaj.
DM
Update: 1/10/06: Ms. Maharaj has sent me the following regarding this post: Download jan_8_06_prof_mcgowan_letter.doc