How Schedule A Asset Freezes Work, and How Sellers Get Money Released

For most of our Schedule A clients, the lawsuit is not the urgent problem. The frozen balance is. Payroll, inventory orders and ad spend all run through the same account, and a freeze that covers everything can do more damage in a month than the case itself.

Where the court's power comes from

Courts generally cannot freeze a defendant's assets before judgment just to secure a future damages award. The Supreme Court said so in Grupo Mexicano de Desarrollo, S.A. v. Alliance Bond Fund, Inc., 527 U.S. 308 (1999). Schedule A plaintiffs get around this by pointing to an equitable remedy: in trademark cases, an accounting of the defendant's profits under the Lanham Act (15 U.S.C. § 1117(a)). Because profits are an equitable remedy, courts in the Northern District of Illinois have long allowed a freeze to make sure those profits are still there at the end of the case.

That rationale has a built-in limit. If the freeze exists to preserve profits from infringing sales, it should not reach much more than those profits. Yet the standard proposed order freezes the whole account, and most sellers never ask the court to look at the difference.

Who is holding the money

The plaintiff does not have your money. The marketplace or payment processor holds it under the court's order, and it stays there until a settlement, a court order or a judgment says otherwise. That matters for timing: even after the plaintiff agrees to release a seller, each platform has to receive the release and process it, which can take a week or more.

Three ways money comes back

Settlement. This is still the most common route. The plaintiff dismisses the seller and tells the platforms to lift the freeze. Settlement payments are often taken from the frozen balance, with the remainder released.

A motion to modify the asset restraint. In our view this is underused. If the accused listing sold forty units, the seller can ask the court to limit the freeze to an amount tied to those sales and release the rest. The motion needs real numbers: platform sales reports for the accused products, ideally with a short declaration explaining them. Judges have been receptive when the evidence is clean, and the recent criticism of routine freezes from the bench makes the argument easier to make than it was a few years ago.

Ending the case against you. If the claim fails, or the seller is dismissed because it was improperly joined or the court lacks jurisdiction over it, the freeze goes with it.

What slows things down

Missing records is the big one. A seller who cannot show what the accused listings earned has no basis to argue the freeze is too broad. Multiple platforms are another; we have seen a release processed on one marketplace in days and on another in weeks. And default ends the conversation entirely, because a default judgment usually orders the frozen funds turned over.

If you are dealing with a freeze, start by exporting sales data for the accused listings from every platform. Whatever strategy you choose, you will need it.