El Salvador - Attachment of Assets
Originally from Attachment of Assets
1. What is the general nature and effect of judicial measures available for plaintiffs to obtain provisional relief affecting property of debtors to obtain security for judgments to be obtained (“attachments”)? Freezing property in place? Placing it in the custody of a third party, such as a court official, sheriff or marshall?
Local legislation establishes a series of provisional measures for plaintiffs in civil and commercial judicial proceedings. Some of these measures offer relief to plaintiffs by establishing a lien over a debtor’s property, or otherwise affecting it. Accordingly, the applicable measures will depend on the types of assets concerned, as well the right invoked by the plaintiff and the type of legal proceeding.
In any case, such provisional relief is awarded after the plaintiff files a motion requesting the competent civil and commercial court to issue a resolution ordering the attachment over the debtor’s property. The court then appoints an executor charged with seizing the debtor’s property. When the attachment affects real property, the executor registers the corresponding order in the Real Property Register of the domicile of the assets or that of the defendant. On the other hand, when moveable property is affected, the executor has to remove the debtor’s goods from where they had been found, leaving an accurate description of them. This property is then placed under the custody of a depositary appointed by the court to maintain the assets in the same condition in which they were when seized.
Additionally, the Salvadoran Civil and Commercial Procedure Code (hereinafter “CPCM”) establishes that attachments may also affect companies as a whole. Under the Salvadoran Commercial Code, entities and corporations that engage in commercial activity are juridical entities. Companies are defined in the Commercial Code as a grouping of assets destined for commercial use and the generation of profits and are legally regarded as moveable property. However, unlike other moveable assets, companies cannot be physically seized and placed in the hands of a court-appointed depositary. As a consequence, it follows that once provisional relief is granted, the competent court will install a financial comptroller or judicial administrator, with supervising authority over financial and accounting matters and investment funds, collection of accounts receivables. Applicable law establishes that, in the event that the financial comptroller notices abuse or misuse in the management of these assets, he or she will notify the court and the plaintiff. In these circumstances, the court will order that that the income destined to the company be withheld in a local authorized bank or in the possession of an authorized third party. The financial comptroller will also give notice to the Attorney General of the Republic regarding the possible occurrence of felonies related to property, the socio-economic order and to public finances.