Brief Fact Summary. The defendants, Denyse and Michael Anderson, were the trustees of a trust in the Cook Islands. The United States District Court issued a temporary restraining order to have the funds transferred to the United States for the purpose of a trial where the defendants were charged with fraud.
Synopsis of Rule of Law. A party petitioning for an adjudication that another party is in civil contempt does not have the burden of showing that eh other party has the capacity to comply with the court’s order, but the party asserting the impossibility defense must show categorically and in detail why he is unable to comply. There is a high burden on the defendant to prove impossibility as a defense to a contempt charge
The FTC may establish knowledge by showing that an individual had actual knowledge of material misrepresentations, was recklessly indifferent to the truth or falsity of a misrepresentation, or had an awareness of a high probability of fraud along with an intentional avoidance of the truth.View Full Point of Law
Issue. Whether a party demonstrates categorically and in detail that he us unable to comply with the repatriation section of a preliminary injunction to transfer to the United States all assets under their control directly and indirectly because the assets are in trust under a trustee that refuses to relinquish the proceeds?
Held. No. The defendants were protectors of the trust and could have forced the trustees to turn over the proceeds. Furthermore, the defendants showed they were aware of their ability to force the trustees to transfer the money. After they stated that they could not comply with the order, the Commission revealed that the defendants were the protectors of the trust. Thereafter, the defendants attempted to resign as protectors of the trust.
Discussion. United States courts will penalize trustees of trusts in foreign lands if the trustees are domiciled or residents of the United States and do not comply with orders in regards to the over seas funds.