Megaupload Cases Put on Hold, But Asset Freezing Still an Option

A United States District Court Judge has just granted Kim Dotcom's request to put the MPAA and RIAA civil actions against him on hold . The reprieve, which will last seven weeks, expressly allows the entertainment companies the freedom to freeze Dotcom's assets anywhere in the world if that is deemed necessary.

megauploadBack in April, the MPAA’s Twentieth Century Fox, Disney, Paramount Pictures, Universal, Columbia Pictures and Warner Bros. filed a brand new lawsuit in a Virginia District Court.

Targeting Kim Dotcom and his associates Mathias Ortmann and Bram Van Der Kolk, the civil case aimed to recover millions in damages said to have been caused by the now-defunct Megaupload file-storage site.

The case filed by the MPAA was quickly followed by another initiated by the RIAA, with both following the pattern set by a U.S. Government criminal case already underway against Dotcom and colleagues in the United States.

To avoid their clients incriminating themselves ahead of the criminal case, Megaupload’s legal team later asked a U.S. court to freeze the civil cases filed by the MPAA and RIAA. Yesterday, United States District Judge Liam O’Grady granted that Motion to Stay.

Mega-OnHold

However, the plaintiffs were successful in their request to have a number of conditions attached to the decision, each designed to give them freedom to embark on further legal action should they feel that’s appropriate.

Firstly, Judge O’Grady’s order does not disallow the plaintiffs from effecting service on any other defendant who has not already been served. They are also free to amend their complaint as they see fit.

Unsurprisingly, the thorny issue of Kim Dotcom’s assets, currently frozen by the New Zealand government pending an appeal, was also addressed.

“If the New Zealand Government loses the appeal, the assets will be unfrozen, and there is a significant risk that they will then be immediately dissipated,” the studios explained in a filing last month.

That concern was dealt with by Judge O’Grady in yesterday’s order by granting the studios freedom to go after Dotcom’s assets wherever they see fit.

“Plaintiffs may institute and pursue any action in the United States or a foreign jurisdiction to preserve Defendants’ assets in the event that such action becomes necessary,” the Judge wrote.

“The Court finds that each of Plaintiffs’ proposed conditions are reasonable under the circumstances of this case because of the possibility that Defendants’ assets abroad may become unfrozen.”

As a result the case is now frozen until August 1, 2014, seven weeks from today. The same decision was made in respect of the civil case filed against Megaupload by the RIAA.

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