1996 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

10-9-1996

Elliott v. Kiesewetter

Precedential or Non-Precedential:

Docket 95-3104,95-3105

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Recommended Citation

"Elliott v. Kiesewetter" (1996). 1996 Decisions. Paper 40.

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 UNITED STATES COURT OF APPEALS 

 FOR THE THIRD CIRCUIT 

 ___________ 

 Nos. 95-3104 and 95-3105 

 ___________ 

 CONSTANCE K. ELLIOTT; PATRICIA J. 

 KIESEWETTER; LINTON A. ELLIOTT; CHARLES L.

 ELLIOTT, individually and/or as a Minor, by 

 Constance K. Elliott, his Parent and 

 Guardian; JONATHAN B. ELLIOTT, a Minor by 

 Constance K. Elliott, the Parent and Guardian 

 vs. 

 WILLIAM B. KIESEWETTER, JR. 

 WILLIAM B. KIESEWETTER, JR. and 

 JAYNE H. KIESEWETTER* 

 (*Pursuant to Rule 12(a), F.A.R.P.), 

 Appellants No. 95-3104. 

 ___________ 

 CONSTANCE K. ELLIOTT; PATRICIA J. 

 KIESEWETTER; LINTON A. ELLIOTT; CHARLES L.

 ELLIOTT; JONATHAN B. ELLIOTT, Minors by 

 Constance K. Elliott, their parent and 

 guardian 

 vs. 

 WILLIAM B. KIESEWETTER, JR. 

 JAYNE H. KIESEWETTER 

 WILLIAM B. KIESEWETTER, JR. and 

 JAYNE H. KIESEWETTER 

 Appellants No. 95-3105. 

 ___________ 

 APPEAL FROM THE UNITED STATES DISTRICT COURT 

 FOR THE WESTERN DISTRICT OF PENNSYLVANIA 
 (D.C. Civil Nos. 93-cv-00753 and 94-cv-00576) 

 ___________ 

 ARGUED MARCH 4, 1996 

 BEFORE: MANSMANN, ALITO, LEWIS, Circuit Judges. 

 (Filed October 9, l996) 

 ___________ 

Kenneth M. Argentieri (ARGUED) 

Nicholas P. Vari 

Kirkpatrick & Lockhart 

1500 Oliver Building 

Pittsburgh, PA 15222 

 Attorneys for Appellant, William B. Kiesewetter, Jr. 

Jan C. Swensen (ARGUED) Jayne H. Kiesewetter 

Swensen, Perer & Johnson 624 Pitcairn Place 

Two PNC Plaza Pittsburh, PA 15232 

Suite 2710 

Pittsburgh, PA 15222 

 Attorney for Appellant, Jayne H. Kiesewetter 

Ronald L. Hicks, Jr. (ARGUED) 

Meyer, Unkovic & Scott 

1300 Oliver Building 

Pittsburgh, PA 15222 

 Attorney for Appellees 

 ___________ 

 OPINION OF THE COURT 

 ___________ 

LEWIS, Circuit Judge. 

 I. 

 This appeal involves a challenge to the district 

court's asset freeze order arising out of certain litigation 

pending in the district court between members of the Kiesewetter 

family. The asset freeze order bound Appellant William B. 

Kiesewetter Jr. and his wife, Appellant Jayne H. Kiesewetter 
(collectively, the "Kiesewetters"). 

 We hold that the district court did not err in entering 

the asset freeze order without holding a hearing, and that it 

made adequate factual findings with respect to its freezing of 

William B. Kiesewetter Jr.'s assets. In addition, we will hold 

that the Freeze Order properly enjoined Jayne Kiesewetter from 

transferring or otherwise disposing of the assets she owned with 

William B. Kiesewetter, Jr. 

 We also hold that the district court properly 

determined that the Appellees, Constance K. Elliott, Patricia J. 

Kiesewetter, Linton A. Elliott, Charles L. Elliott, and Jonathan 

B. Elliott (collectively, the "Beneficiaries"), would suffer 

irreparable harm without the protection of an asset freeze and 

that the hardship to the Kiesewetters did not prevent entry of 

the order. We will reverse the district court's waiver of the 

Rule 65 bond requirement because it did not make any findings as 

to the Beneficiaries' financial ability (or inability) to post 

the bond. Finally, we will reject the Kiesewetters' arguments 

that the asset freeze order was too broad and that it violated 

their due process rights. 

 II. 

 A. The Parties and the Underlying Litigation 

 The parties to this appeal and the underlying 

litigation are all members of the same family. The Beneficiaries 

brought two actions against William B. Kiesewetter, Jr. The 

first action was a demand for an accounting of their family's 

assets and is premised on various claims against Mr. Kiesewetter, 

alleging breach of fiduciary duties, fraud, unjust enrichment and 

violations of the Uniform Gifts to Minors Act ("UGMA") 

(hereinafter the "Accounting Action"). A year after filing the 

Accounting Action, the Beneficiaries filed a second lawsuit 

alleging that Mr. Kiesewetter and his second wife, Appellant 

Jayne H. Kiesewetter, fraudulently conveyed Kiesewetter family 

assets from William B. Kiesewetter, Jr.'s name into the joint or 

individual name of Jayne H. Kiesewetter (hereinafter the 

"Fraudulent Conveyance Action") in order to protect the assets 

from a judgment in the Accounting Action. 

 The litigation between the Kiesewetter family members 

began shortly after the death in October 1992 of Grace J. 

Kiesewetter, the wife of the late Dr. William B. Kiesewetter 

("Dr. Kiesewetter"). Dr. Kiesewetter had passed away years 

earlier. Constance K. Elliott, Patricia K. Elliott and William 

B. Kiesewetter, Jr. are the daughters and son of Dr. and Mrs. 

Kiesewetter. Linton, Charles and Jonathan Elliott are the sons 

of Appellee Constance Elliott and the only grandchildren of Dr. 

and Mrs. Kiesewetter. 

 The primary dispute between the Kiesewetter family 

members stems from the manner in which certain family assets, 

properties and accounts were handled and managed. The 

Beneficiaries allege that, prior to their deaths, Dr. and Mrs. 

Kiesewetter placed substantially all of their assets into the 

names of the Beneficiaries and William B. Kiesewetter, Jr. to 

avoid or lessen the estate tax liability upon their respective 

deaths. William B. Kiesewetter, Jr., a licensed attorney with a 
masters degree in taxation, was Dr. and Mrs. Kiesewetter's 

natural choice as the person to manage these assets. The 

Beneficiaries allege that Mr. Kiesewetter agreed to manage the 

assets on behalf of himself and the Beneficiaries. According to 

the Beneficiaries, they discovered after Grace J. Kiesewetter's 

death that Mr. Kiesewetter had acquired their property rights in 

the family assets without their knowledge or consent. 

 In the Accounting Action, the Beneficiaries alleged 

that Mr. Kiesewetter's mismanagement and other fraudulent conduct 

resulted in the dissipation of the family assets that had been 

placed in their names and that Mr. Kiesewetter was liable to them 

for the value of their collective interests in those assets. The 

Beneficiaries sought an accounting of the family's financial 

affairs and of the UGMA accounts established for Linton A. 

Elliott, Charles L. Elliott and Jonathan B. Elliott. The 

Beneficiaries demanded over $5 million in compensatory damages 

plus punitive damages and other equitable relief. 

 On December 5, 1994, a jury returned a verdict by 

special interrogatories in the Accounting Action in which it 

determined, inter alia, that Mr. Kiesewetter had breached various 

fiduciary duties that he owed to the Beneficiaries. Evidence at 

trial revealed that the Beneficiaries had held property interests 

in numerous Kiesewetter family assets. These assets included 

life insurance proceeds, pension proceeds, property sale 

proceeds, trust funds, bonds, and various bank accounts. 

 At trial, the Beneficiaries established that their 

collective interests in these family assets had a total principal 

value of over $3.4 million. The evidence established that the 

Beneficiaries' interests in these assets were placed into 

accounts held only in Mr. Kiesewetter's name, and that Mr. 

Kiesewetter reported in excess of $1 million in interest and 

dividend income from these assets. In addition, the 

Beneficiaries introduced evidence suggesting that they may have 

an interest in other assets Mr. Kiesewetter acquired using a 

portion of their interests in the family assets. 

 On December 30, 1994, Mr. Kiesewetter moved for a new 

trial or alternatively for judgment notwithstanding the verdict. 

None of the bases for his motion pertained to the sufficiency of 

the trial evidence regarding the Beneficiaries' interests in the 

family assets or the principal value of those interests. In 

addition, Mr. Kiesewetter did not challenge the jury's findings 

of liability on the basis that the evidence was insufficient. 

 B. The Asset Freeze 

 On December 13, 1994, the Beneficiaries moved the 

district court, pursuant to its inherent equitable powers and 

Rule 65, to freeze all of the Kiesewetter family assets held in 

the name of or on behalf of Mr. Kiesewetter, including those 

assets subject to the Fraudulent Conveyance Action. (A. 91-112). 

In support of their motion, the Beneficiaries relied on facts 

adduced at trial and the jury's verdict. In the motion, the 

Beneficiaries stated that the purpose of the freeze order was "to 

preserve the assets and properties in the possession, custody or 

control of [Mr. Kiesewetter] that will be necessary to satisfy 

the judgment and other equitable remedies ultimately to be 
entered in [the Accounting Action] in order to make [Appellees] 

whole." (A. 99). Attached to the Beneficiaries' motion was a 

proposed asset freeze order, in which the Beneficiaries proposed 

a freeze on all assets held in the name of or on behalf of Mr. 

Kiesewetter, except for monthly payments of up to $2,000 for 

ordinary living expenses, including attorneys' fees. (A. 95-97). 

 After Mr. Kiesewetter and Jayne H. Kiesewetter filed 

separate responses in opposition to the Beneficiaries' request 

for an asset freeze, the district court held two telephone 

conferences with counsel to discuss the freeze order request. At 

the first conference, the district court advised counsel that, 

unless Mr. Kiesewetter voluntarily posted a bond in an amount 

sufficient to satisfy a judgment against him in the Accounting 

Action, it would enter an order granting the Beneficiaries' 

freeze order request. The district court then scheduled a second 

telephone conference, at which Mr. Kiesewetter was to advise the 

court whether he would voluntarily post a bond. 

 Prior to the second conference, the Beneficiaries 

submitted to the district court and all counsel a summary of the 

Beneficiaries' damages for purposes of determining the bond 

amount (S.A. 1-4). The summary, based upon the evidence at trial 

and the jury's punitive damage award, indicated that the 

Beneficiaries' total damages, with interest and capital 

appreciation, equalled in excess of $6 million. Neither Mr. 

Kiesewetter nor Jayne H. Kiesewetter submitted any materials to 

the district court prior to the second conference. 

 At the second conference, Mr. Kiesewetter's counsel 

stated that Mr. Kiesewetter was financially unable and personally 

unwilling to post a bond for several million dollars. The 

district court then ruled that it would impose a freeze on all 

assets held in the name or on behalf of Mr. Kiesewetter for a 

period of 30 days, during which time it would require Mr. 

Kiesewetter to post a bond of $4 million. The court also ruled 

that, if Mr. Kiesewetter did not file the requisite bond within 

30 days, the asset freeze would remain in effect until final 

disposition of both lawsuits, during which time it would permit 

Mr. Kiesewetter to access funds only for ordinary and reasonable 

living expenses. 

 On February 1, 1995, after considering the 

Beneficiaries' proposed order and Mr. Kiesewetter's objections 

thereto, the district court entered a freeze order against Mr. 

Kiesewetter and Jayne H. Kiesewetter (the "Freeze Order"). The 

Freeze Order enjoined Mr. Kiesewetter and Jayne H. Kiesewetter 

from: 

 . . . withdrawing, transferring, 

 encumbering, disposing of and/or secreting 

 away any monies, stocks, bonds, properties 

 (real or personal) and/or other assets, 

 located anywhere and held or opened in any 

 capacity or name, other than payments for 

 [Mr. Kiesewetter's] ordinary and reasonable 

 basic living expenses not to exceed $2,500 

 per month, without the approval of the Court 

 or of Plaintiffs' counsel. 
(A. 163). The Freeze Order also prohibited Jayne H. Kiesewetter 

from disposing of her assets without proving to the district 

court that the assets did not derive from Mr. Kiesewetter. 

 On February 3, 1995, Jayne H. Kiesewetter filed an 

emergency motion for relief from the Freeze Order. In her 

motion, Jayne H. Kiesewetter alleged that she controlled two 

trusts and five bank accounts that provided her at least $13,000 

in monthly income and were independently acquired by her. Jayne 

H. Kiesewetter sought to have these assets released by the court 

from its Freeze Order. In response, the district court held a 

telephone conference with counsel regarding the motion. The 

court then entered an order exempting these particular assets 

from the Freeze Order. This order, however, contained the 

proviso that Jayne H. Kiesewetter submit, within 21 days, a 

verification of the noncommingling of the independently acquired 

assets and of the existence of the trust agreements. Jayne H. 

Kiesewetter never filed the verification. 

 Mr. Kiesewetter also filed a motion to modify the 

Freeze Order. Mr. Kiesewetter sought an increase in the $2,500 

monthly living expense cap to $9,112, as well as permission to 

pay his attorneys' fees out of the frozen funds. Mr. Kiesewetter 

attached an affidavit to the motion containing a schedule of Mr. 

Kiesewetter's purported "ordinary and reasonable [monthly] 

financial obligations." According to the schedule, Mr. 

Kiesewetter's monthly living expenses include $1,500 in air 

travel and rental cars, $1,288 in club dues and expenses, $650 in 

groceries and $405 in self storage units. (A. 190-92). The 

schedule also lists monthly expenses covering the joint 

obligations of Mr. Kiesewetter and Jayne H. Kiesewetter, 

including items such as $1,978/month in rent for two apartments 

in Pittsburgh (even though Mr. Kiesewetter and Jayne H. 

Kiesewetter are the registered owners of the Kiesewetter family 

home in Pittsburgh), and $1,017/month in lawn care maintenance 

for both their Pittsburgh home and their Florida condominium. 

 III. 

 The Kiesewetters argue that the district court erred by 

not holding an evidentiary hearing prior to its entry of the 

Freeze Order and by entering the Freeze Order without setting 

forth findings of facts and conclusions of law. 

 A. Evidentiary Hearing 

 The district court entered the Freeze Order without a 

hearing, determining that: 

 After considering such argument [in the 

 telephone conferences with counsel] as well 

 as the evidence presented at trial and by 

 motion or response and the jury's December 5, 

 1994 verdict, the Court finds that an 

 accounting is required in order to determine 

 Plaintiffs' damages, that Plaintiffs are 

 likely to become entitled to the encumbered 

 funds upon the completion of the accounting, 

 that Plaintiffs' damages are expected to be 

 at least $4 million, and that Plaintiffs will 

 suffer immediate and irreparable harm if no 
 order is issued. 

(A. 157). In making its findings, the district court determined 

that there were enough facts in the record to support its 

conclusions and that an evidentiary hearing was unwarranted. We 

review the district court's decision to issue the Freeze Order 

without holding an evidentiary hearing only for an abuse of 

discretion. Acierno v. New Castle County, 40 F.3d 645, 652 (3d 

Cir. 1994). 

 In determining whether the district court should have 

held an evidentiary hearing, we must focus on whether there were 

any issues of fact in dispute with respect to the Freeze Order. 

A district court cannot issue a preliminary injunction that 

depends upon the resolution of disputed issues of fact unless the 

court first holds an evidentiary hearing. Professional Plan 

Examiners of New Jersey, Inc. v. Lefante, 750 F.2d 282, 288 (3d 

Cir. 1984). We have recognized, however, that "a decision [to 

enter an order] may be based on affidavits and other documentary 

evidence if the facts are undisputed and the relevant factual 

issues are resolved." Bradley v. Pittsburgh Board of Education, 

910 F.2d 1172, 1175-76 (3d Cir. 1990) (emphasis added). 

 The Kiesewetters argue that in order to resolve the 

Beneficiaries' request for the asset freeze, the district court 

was forced to "resolve disputed issues of fact which directly 

impacted upon the fundamental inquiry of whether PlaintiffAppellees will suffer irreparable harm if no injunction is 

issued." Appellants' Br. 18. The Kiesewetters identified the 

following "factual issues" as being in dispute: (1) whether Mr. 

Kiesewetter was likely to improperly dissipate or conceal the 

assets that remained in his name; (2) whether Jayne H. 

Kiesewetter was likely to assist Mr. Kiesewetter in dissipating 

the assets; (3) whether the Beneficiaries are likely to recover a 

judgment in an amount that exceeds Mr. Kiesewetter's net worth. 

Id. at 18-19. 

 In refusing to hold an evidentiary hearing, the 

district court impliedly resolved the above "factual issues" 

against the Kiesewetters. The Kiesewetters offer little to 

suggest that to do so was an abuse of discretion. In addition, 

close examination reveals that the Kiesewetters' "factual issues" 

were either not in dispute given the facts in the record, or were 

not relevant to the district court's entry of the Freeze Order. 

 Prior to the district court's entry of the Freeze 

Order, the jury determined that the Beneficiaries were entitled 

to their share of the family assets and that Mr. Kiesewetter was 

liable for the dissipation of those assets. In addition, the 

jury determined that Mr. Kiesewetter had fraudulently obtained 

the Beneficiaries' interest in the family assets, that he had 

unjustly enriched himself at the Beneficiaries' expense and that 

his conduct was sufficiently outrageous to warrant the imposition 

of $500,000 in punitive damages. Thus, the Kiesewetters' first 

"factual issue" was not improperly ignored by the district court. 

It was hardly an abuse of discretion for the district court to 

conclude, based on Mr. Kiesewetter's prior course of conduct with 

respect to the family assets, that he was likely to dissipate the 

remaining assets if he was not restrained from doing so. 
 The second factual issue raised by the Kiesewetters, 

whether Jayne H. Kiesewetter was likely to assist Mr. Kiesewetter 

in dissipating the assets, is in dispute but does not preclude 

entry of the Freeze Order. The existence of this factual issue 

does not mandate a finding that the district court could not have 

entered, without a hearing, a freeze order enjoining Mr. 

Kiesewetter. There are facts in the record that indicate that 

there is a strong likelihood that Mr. Kiesewetter will, if he is 

not enjoined, transfer additional assets to Jayne H. Kiesewetter 

to avoid payment of a judgment in the Accounting Action. In the 

Fraudulent Conveyance Action, Mr. Kiesewetter admitted that he 

had transferred most, if not all, of the fraudulently obtained 

family assets to joint ownership with Jayne H. Kiesewetter. (A. 

75-76). Further, in response to the Beneficiaries' motion for an 

asset freeze, Mr. Kiesewetter acknowledged that he was aware 

that, in Pennsylvania, his conveyance of the family assets to 

joint ownership with his wife, Jayne H. Kiesewetter, caused the 

assets to become tenants by entireties property. (A. 126). Mr. 

Kiesewetter was also aware that tenants by entireties property is 

protected under Pennsylvania law from any judgment which might be 

rendered against an individual spouse. (A. 126). 

 The third factual issue that the Kiesewetters claim the 

district court resolved against them was never in fact resolved 

by the district court in its entry of the Freeze Order. The 

district court's entry of the Freeze Order was not based on an 

evaluation of Mr. Kiesewetter's net worth. Mr. Kiesewetter 

refused to post the $4 million bond, perhaps leading the court to 

consider whether he would ultimately be able to satisfy a multimillion dollar judgment. A district court is clearly permitted 

to consider the likelihood that a defendant will be able to pay a 

judgment in determining whether to enter an asset freeze order. 

See Hoxworth v. Blinder, Robinson & Co., Inc., 903 F.2d 186, 205 

(3d Cir. 1990). Further, the Freeze Order was entered to 

preserve what remained of the family assets. The evidence at 

trial revealed that the total principal value of the family 

assets to which the Beneficiaries had an interest equalled over 

$3.4 million. Adding the jury's punitive damages award and a 

potential interest award, the district court set the $4 million 

bond amount, reasonably approximating the amount of the judgment 

that would ultimately be entered against Mr. Kiesewetter. The 

court made no finding with respect to whether this amount 

exceeded Mr. Kiesewetter's net worth. 

 As such, we conclude that the district court did not 

abuse its discretion in refusing to hold an evidentiary hearing 

prior to its entry of the Freeze Order enjoining Mr. Kiesewetter. 

 B. Factual Findings -- Rule 52(a) 

 Rule 52(a) provides that "in granting or refusing 

interlocutory injunctions the court shall . . . set forth the 

findings of fact and conclusions of law which constitute grounds 

of its actions." Fed. R. Civ. P. 52(a). The Supreme Court has 

recognized the importance of requiring district courts to comply 

with Rule 52(a), stating that: 

 It is of the highest importance to a proper 

 review of the action of a court in granting 
 or refusing a preliminary injunction that 

 there should be fair compliance with Rule 

 52(a) of the Rules of Civil Procedure. . . . 

 [I]f appellants conceived themselves 

 aggrieved by the action of the court upon 

 motion for preliminary injunction, they were 

 entitled to have explicit findings of fact

 upon which the conclusion of the court was

 based. Such findings are obviously necessary 

 to the intelligent and orderly presentation 

 and proper disposition of an appeal. 

Mayo v. Lakeland Highlands Canning Co., Inc., 309 U.S. 310, 316- 

317 (1940). We have recognized the continuing import of the 

Court's fact finding requirements in Mayo. Bradley, 910 F.2d at 

1178. We have held that a district court's order must be vacated 

if its findings "are inadequate to explain the basis for [its] 

ruling or to permit meaningful review" of its ruling. 

Professional Plan Examiners, 750 F.2d at 289. 

 The Kiesewetters argue that "Rule 52(a) has been 

flaunted" because the district court did not make adequate 

factual findings supporting its Freeze Order. Reply Br. 13. In 

entering the Freeze Order, the district court found that: (1) An 

accounting was required in order to determine the Beneficiaries' 

compensatory damages; (2) the Beneficiaries were likely to become 

entitled to the encumbered funds upon completion of the 

accounting; (3) the Beneficiaries' damages were expected to be at 

least $4 million; and (4) the Beneficiaries would suffer 

immediate and irreparable harm if no order was issued. (A. 157). 

The district court indicated that these findings were based upon 

the evidence presented both at trial and by motion or response, 

as well as on the jury's verdict. 

 The Kiesewetters have not identified what particular 

factual findings were not made by the district court, nor have 

they challenged the propriety of the district court's findings. 

Instead, they assert in conclusory fashion that "the District 

Court did not state its findings of fact in this case." 

Appellants' Br. 20. We construe this argument as an argument 

that the factual findings made by the district court failed to 

satisfy the requirements of Rule 52(a). 

 In determining whether a district court has made 

adequate findings supporting the issuance of an injunction, we 

have "looked to see whether the record provides a sufficient 

basis to ascertain the legal and factual grounds for the grant or 

denial of the injunction." Bradley, 910 F.2d at 1178-79. In 

cases in which a jury has issued a verdict, the jury's resolution 

of factual and legal issues in reaching the verdict can properly 

serve as a basis for the district court's issuance of an 

injunction. See, e.g., Educational Testing Services v. Katzman, 

793 F.2d 533, 546 (3d Cir. 1986); Danny Kresky Enterprises Corp. 

v. Magid, 716 F.2d 206, 214-15 (3d Cir. 1983). 

 In this case, the district court's factual findings 

were sufficient to support the entry of the Freeze Order. The 

district court entered the Freeze Order only after the jury found 

that the Beneficiaries had a legitimate interest in the 
Kiesewetter family assets and that Mr. Kiesewetter, in acquiring 

the Beneficiaries' interests in the assets, had breached his 

fiduciary duties, committed fraud, and unjustly enriched himself. 

Thus, the factual findings underlying the jury's verdict were 

properly used by the district court to support its entry of the 

Freeze Order. The facts supporting the jury's verdict, along 

with the facts found by the district court, clearly provide the 

legal and factual basis for the district court's issuance of the 

injunction and, as such, satisfied the requirements of 

Rule 52(a). 

 Accordingly, we reject the Kiesewetters' argument that 

the district court abused its discretion by not making adequate 

factual findings in support of its issuance of the Freeze Order. 

 IV. 

 The district court's Freeze Order was directed in part 

at Jayne H. Kiesewetter, providing that: 

 This freeze order does not affect any 

 accounts that involve monies, properties or 

 other assets that belong to Jayne H. 

 Kiesewetter which she acquired independently 

 from Mr. Kiesewetter. However, during the

 period of this freeze order, Jayne H. 

 Kiesewetter shall not be permitted to make

 any withdrawals, transfers, encumbrances or 

 other dispositions of such independently- 

 acquired assets until she files with the 

 Court and serves on Plaintiffs' counsel an

 accounting of such assets, which shall 

 include the location, identity and 

 origin/source of such asset. 

Dist. Ct. Order. 3 (emphasis added). 

 The Kiesewetters argue that the district court erred in 

not making any findings with respect to the Beneficiaries' 

likelihood of success on the merits against Jayne H. Kiesewetter 

in the Fraudulent Conveyance Action or the Accounting Action. 

The Beneficiaries suggest that, because both Mr. Kiesewetter and 

Jayne H. Kiesewetter admitted that Mr. Kiesewetter transferred 

some of the family assets from Mr. Kiesewetter's ownership to 

Jayne H. Kiesewetter's ownership, Jayne H. Kiesewetter will 

ultimately be liable to the Beneficiaries. 

 In entering the Freeze Order, the district court 

concluded that "[p]laintiffs are likely to become entitled to the 

encumbered funds upon completion of the accounting, that 

Plaintiffs damages are expected to be at least $4 million, and 

that Plaintiffs will suffer immediate and irreparable harm if no 

order is issued." (A. 157). The "encumbered funds" that the 

district court referred to included assets that were jointly held 

in the names of William B. Kiesewetter and Jayne H. Kiesewetter. 

Thus, implicit in the district court's conclusion that the 

Plaintiffs will become entitled to the encumbered funds is a 

finding that the Beneficiaries will likely succeed on the merits 

in the Fraudulent Conveyance Action. 

 We conclude that the district court's finding is 

warranted. Under Pennsylvania law, "[w]hen a creditor 
establishes that a grantor was in debt at the time of the 

conveyance, the burden shifts to the grantees to establish by 

clear and convincing evidence, either that the grantor was then 

solvent and not rendered insolvent by the conveyance, or that he 

received fair consideration for the conveyance." Coscia v. 

Hendrie, 629 A.2d 1024, 1026 (Pa. Super. 1993) (citation 

omitted); see also Stinner v. Stinner, 446 A.2d 651 (Pa. Super. 

1982); United States v. Purcell, 798 F. Supp. 1102 (E.D. Pa. 

1991), aff'd, 972 F.2d 1334 (3d Cir. 1992) (Table). As 

Plaintiffs point out, they established that William B. 

Kiesewetter unlawfully obtained the family assets, and he and 

Jayne H. Kiesewetter admit that William transferred most of these 

assets held in his sole name to his joint name with Jayne. There 

is ample evidence from which the district court could have found 

that William was in debt to plaintiffs at the time of the 

transfers. The burden of establishing otherwise, or of showing 

that the conveyances were supported by consideration, then 

shifted to Jayne. Jayne H. Kiesewetter offered no evidence as to 

William's continued solvency, and she presented no evidence to 

the district court suggesting that William's transfer of the 

family assets to her was supported by any consideration. 

Indeed, plaintiffs presented evidence during the trial in the 

accounting action that William's movement of the family's assets 

into his joint name with Jayne occurred after or about the time 

when plaintiffs had employed counsel to investigate his 

activities, and that William had a meeting with plaintiffs where 

he failed to reveal to them the true nature of his conduct. SeeApp. 107. 

For these reasons, we will not disturb the district

court's finding that plaintiffs are likely to succeed on the 

merits of the fraudulent conveyance action. 

 V. 

 The Kiesewetters next argue that we should vacate the 

Freeze Order because the district court erred in finding that the 

Beneficiaries would suffer irreparable harm absent the Freeze 

Order and in not balancing the harm to be suffered by the 

Kiesewetters as a result of the Freeze Order. 

 A. Irreparable Harm 

 In Hoxworth, we recognized that a district court had 

the equitable power in certain situations to protect a future 

damages remedy. 903 F.2d at 197. We noted, however that this 

power is far from unlimited. Specifically, we stated that: 

 Of course, just because a district court 

 enjoys the power to protect a potential 

 future damages remedy with a preliminary 

 injunction does not mean that such an 

 injunction is appropriate in a run-of-the- 

 mill damages action. The traditional 

 requirements for obtaining equitable relief 

 must be met. These include, in this context, 

 a showing that plaintiffs are likely to 

 become entitled to the encumbered funds upon 

 final judgment and a showing that without the 

 preliminary injunction, plaintiffs will 

 probably be unable to recover those funds. 
Id. 

 The Kiesewetters focus on the second Hoxworthrequirement, which is 

essentially an irreparable harm inquiry 

(i.e., if plaintiffs cannot recover the funds absent the 

injunction, they will suffer irreparable harm), arguing that "the 

irreparable harm element is established by a showing that, in the 

absence of an injunction, the party being enjoined is likely to 

wrongfully dissipate or conceal his [or her] assets." 

Appellants' Br. 25. The Beneficiaries counter by arguing that in 

Hoxworth, we determined that irreparable injury exists if a 

judgment will probably go unsatisfied absent an injunction. 

Appellees' Br. 37. 

 We need not rule, in this context, on the parties' 

arguments regarding Hoxworth to affirm the district court's entry 

of the Freeze Order in this case. That irreparable harm would 

occur absent an asset freeze is even more apparent where the very 

assets subject to a potential judgment will likely be dissipated 

without entry of the order. Thus, consistent with Hoxworth, we 

hold that a court may find that a party seeking an asset freeze 

to preserve a money judgment may show irreparable injury by 

showing that the freeze is necessary to prevent the consumption, 

dissipation or fraudulent conveyance of the assets that the party 

pursuing the asset freeze seeks to recover in the underlying 

litigation. The fact that the assets subject to the Freeze 

Order are primarily money assets does not preclude entry of a 

freeze order enjoining the use of those assets. 

 In fact, the money assets subject to the Freeze Order 

will likely provide the Beneficiaries relief which is equitable 

in nature. The equitable nature of the Beneficiaries' desired 

relief offers an additional compelling justification for 

affirming the district court's entry of the Freeze Order. The 

Beneficiaries seek to have returned to them property interests in 

assets that the jury determined were given to them but never 

received due to Mr. Kiesewetter's unlawful conduct. Mr. 

Kiesewetter admitted at trial that his sole source of income 

since 1983 has derived from his "management" of the family 

assets. Thus, the only way that the Beneficiaries will be able 

to be made whole is by recovering what is left of the family 

assets and preventing Mr. Kiesewetter from further dissipating 

the assets. Given Mr. Kiesewetter's history of fraud with 

respect to the family assets, it was not clear error for the 

district court to conclude that the Beneficiaries would likely 

suffer irreparable harm, as a result of Mr. Kiesewetter's further 

dissipation of the assets, without the Freeze Order. 

 We emphasize that this is an extraordinary case that 

demanded extraordinary measures by the district court to preserve 

what was left of the family assets. Given that a jury had 

already concluded that Mr. Kiesewetter has unconscionably lied to 

and stolen from his family members, the district court properly 

entered the Freeze Order against Mr. Kiesewetter and has properly 

placed a limit on the amount that Mr. Kiesewetter can spend on 

"ordinary and reasonable basic living expenses" during the course 

of the litigation. 

 B. Balancing of Hardships 
 The Kiesewetters argue that the district court erred in 

not balancing the hardships to the respective parties before 

entering the Freeze Order. In Hoxworth, we held that "[o]f 

course a preliminary injunction causing serious injury to 

defendants can be justified if it inflicts no more harm than 

reasonably necessary to prevent plaintiffs who are likely to 

prevail on the merits from suffering an irreparable injury." 903 

F.2d at 207. 

 The Kiesewetters claim that Mr. Kiesewetter "is 

suffering tremendous hardship" because he is "unable to meet his 

monthly obligations or pay his attorneys . . . ." Appellants' 

Br. 28. These obligations are detailed in his motion to increase 

his monthly allowance, which is currently before the district 

court. As we noted earlier, these obligations include $1,500 per 

month in air travel and rental car expenses, $1,300 per month in 

club dues and expenses, $405 in self-storage unit rental costs, 

and approximately $1,000 in lawn care and maintenance expenses 

for two residences in Pittsburgh and Florida. In addition, Mr. 

Kiesewetter's obligations include rent payments on two apartments 

in Pittsburgh approximating $2,000, despite the fact that he and 

Jayne H. Kiesewetter are the registered owners of a home in 

Pittsburgh. Finally, the Kiesewetters, in their hardship 

discussion, fail to mention that Jayne H. Kiesewetter (Mr. 

Kiesewetter's wife) receives at least $13,000 a month from assets 

not effected by the Freeze Order. 

 We cannot conclude that the Freeze Order, which may 

prevent Mr. Kiesewetter from covering the above living expenses, 

constitutes a hardship that outweighs the potential harm faced by 

the Beneficiaries, who have already lost a considerable portion 

of their collective interests in the family assets due to Mr. 

Kiesewetter's blatant fraud. The inability to spend over $6,000 

a month on primarily luxury expenses does not strike us as a 

hardship. We are, however, unwilling to conduct our own analysis 

of whether Mr. Kiesewetter's claim that he is harmed by not being 

able to meet his monthly obligations is valid. The district 

court presumably is conducting such an analysis in its 

consideration of Mr. Kiesewetter's motion to increase his monthly 

amount. As such, we will not vacate the Freeze Order on the 

grounds that the district court failed to balance the hardship to 

the parties involved. 

 VI. 

 The district court, in its Freeze Order, waived the 

requirement that the Beneficiaries post a security bond. 

Specifically, the court held: 

 The posting of security pursuant to 

 Fed.R.Civ.Proc. No. 65(c) is hereby waived in 

 light of the equitable and substantial nature 

 of Plaintiffs' claims against Mr. 

 Kiesewetter, the jury's December 5, 1994 

 verdict finding against him with respect to 

 all such claims, and the lack of proof by Mr. 

 Kiesewetter as to any hardship on him as a 

 result of this freeze order. 
Dist. Ct. Order 5. 

 The Kiesewetters argue that, because of the financial 

harm that Mr. Kiesewetter suffered as a result of the Freeze 

Order, the district court's waiver of the requirement that the 

Beneficiaries post a security bond was error. Rule 65(c) of the 

Federal Rules of Civil Procedure provides in pertinent part that: 

 (c) Security. No restraining order or 

 preliminary injunction shall issue except 

 upon the giving of security by the applicant, 

 in such sum as the court deems proper, for 

 the payment of such costs and damages as may 

 incurred or suffered by any party who is 

 found to have been wrongfully enjoined or 

 restrained. 

Fed.R.Civ.P. 56(c). 

 We have strictly interpreted the bond requirement of 

Rule 65(c) and have recognized that such a bond "provides a fund 

to use to compensate incorrectly enjoined defendants." Hoxworth, 

903 F.2d at 210 (quoting Instant Air Freight Co. v. C.F. Air 

Freight, Inc., 882 F.2d 797, 805-06 n.9 (3d Cir. 1989)). In 

Hoxworth, we noted that, "[w]hile there are exceptions, the 

instances in which a bond may not be required are so rare that 

the requirement is almost mandatory." Id. 

 Notwithstanding our strict reading of Rule 65(c), we 

have indicated that there may be instances in which a strict 

reading of the rule is not appropriate. In Temple University v. 

White, we explicitly recognized an exception to the Rule 65(c) 

bond requirement. 941 F.2d 201, 219 (3d Cir. 1991). Relying on 

an approach articulated by the First Circuit, in Temple 

University we determined that, "at least in noncommercial cases, 

the court should consider the possible loss to the enjoined party 

together with the hardship that a bond requirement would impose 

on the applicant." Id. (quoting Crowley v. Local No. 82, 

Furniture & Piano, 679 F.2d 978 (1st Cir. 1982)). Thus, the 

Temple University exception involves a balance of the equities of 

the potential hardships that each party would suffer as a result 

of a preliminary injunction. Where the balance of these equities 

weighs overwhelmingly in favor of the party seeking the 

injunction, a district court has the discretion to waive the Rule 

65(c) bond requirement. 

 In this case, the district court made no findings 

regarding the Beneficiaries' financial ability to post the bond. 

The district court based its waiver on "the equitable and 

substantial nature of Plaintiffs' claims against Mr. Kiesewetter, 

the jury's December 5, 1994 verdict finding against him with 

respect to all such claims, and the lack of proof by Mr. 

Kiesewetter as to any hardship on him as a result of this freeze 

order." The district court's failure to make findings regarding 

Beneficiaries' potential financial hardship suggests that it did 

not adequately perform the balancing of equities required to find 

a Temple University exception to the Rule 65(c) bond requirement. 

 Thus, we will reverse the district court's waiver of 

the security bond and remand the case so that the district court 

can determine whether a balance of the potential hardships to 
both parties weighs in favor of the Beneficiaries. See Temple 

University, 941 F.2d at 220 n.28 (concluding that the proper 

remedy of a district court error in waiving the Rule 65(c) bond 

requirement necessitates a remand for reconsideration). 

 In so holding, we make no judgment as to whether the 

actual waiver was appropriate. We reverse only on the basis that 

the district court failed to make findings regarding the 

financial hardships that a bond requirement would impose upon the 

Beneficiaries. We have consistently determined that strict 

adherence to the requirements of Rule 65(c) is necessary to 

combat rash, baseless applications for preliminary injunctions. 

As such, we must ensure that the exception we have set forth in 

Temple University remains a narrow exception. Because departure 

from the bond requirement is rare, we hold that a district court 

must make specific findings, in granting a Temple Universityexception, 

regarding the relative hardships to each party. 

 VII. 

 The Kiesewetters restate their arguments with regard to 

the district court's refusal to hold an evidentiary hearing prior 

to entry of the Freeze Order and argue that the refusal amounted 

to an unconstitutional denial of their due process rights. The 

Kiesewetters remind us that "[f]undamental concepts of due 

process require that a person may not be deprived of his property 

without first being afforded the opportunity to be heard." 

Appellants' Br. 32, citing Simmerman v. Corino, 27 F.2d 58, 64 

(3d Cir. 1994). The Kiesewetters suggest that they were not 

permitted to address several significant factual issues prior to 

issuance of the injunction. 

 An individual's due process right to an opportunity to 

be heard does not ensure a hearing in all contexts. To so 

require would grind judicial and administrative gears to a 

screeching halt. Thus, an individual's due process right to an 

opportunity to be heard can be preserved by courts or 

administrative bodies in many different ways. The constitutional 

requirements of due process are not technical, nor is any 

particular form of procedure always necessary to provide due 

process. Mitchell v. W.T. Grant Co., 416 U.S. 600, 609 (1974). 

 We are convinced that the Kiesewetters had several 

opportunities to be heard, and as such did not suffer a denial of 

their due process rights. The Kiesewetters had many 

opportunities to respond both in writing and orally to the 

district court before its entry of the Freeze Order. In fact, 

both William B. Kiesewetter, Jr. and Jayne H. Kiesewetter 

submitted written responses after the Beneficiaries filed their 

request for an asset freeze. In addition, the Kiesewetters' 

counsel were present during the conferences held on January 20 

and 25, 1995, and both parties had the opportunity to file 

objections to the proposed orders prior to the district court's 

final entry of the Freeze Order. Finally, both Mr. Kiesewetter 

and Jayne H. Kiesewetter have filed requests to modify the Freeze 

Order. In fact, Jayne H. Kiesewetter has already requested and 

received relief, based on her due process rights, from the 

district court with respect to assets that she independently 

acquired. (A. 170). 
 Clearly, the Kiesewetters had ample opportunity to 

challenge the district court's entry of the Freeze Order. As 

such, we reject the Kiesewetters' argument that the district 

court deprived them of their due process rights. 

 Finally, the Kiesewetters argue that the relief 

provided by the Freeze Order "goes well beyond the proper purpose 

of preserving the status quo." Appellants' Br. 34. We have 

recognized that an injunction should be designed to preserve the 

status quo and should not be punitive in nature. CFTC v. 

American Metals Exchange Corp., 991 F.2d 71, 79 (3d Cir. 1993). 

 The Freeze Order in this case does no more than 

preserve the Kiesewetter family assets from further dissipation 

by the Kiesewetters. It merely attempts to ensure that the 

Beneficiaries receive some legal and equitable relief once the 

accounting is completed. This is precisely what an asset freeze 

should accomplish. Id. at 79. As stated before, because Mr. 

Kiesewetter has a motion pending before the district court with 

respect to whether the $2,500 limit on his monthly spending 

should be increased, we need not address in this appeal the 

Kiesewetters' argument that the Freeze Order's restriction on Mr. 

Kiesewetter's ability to meet his financial obligations 

impermissibly amounts to punishment, rather than preservation of 

the status quo. We find that the district court's Freeze Order, 

including the $2,500 spending limit, did nothing more than 

attempt to preserve the status quo and was supported by facts in 

the record. 

 VIII. 

 We hold that the district court properly concluded that 

the Beneficiaries would suffer irreparable harm without the 

protection of the Freeze Order and that the potential hardship to 

the Kiesewetters did not preclude entry of the order. 

Accordingly, we will affirm district court's entry of the Freeze 

Order. Finally, we hold that the district court's waiver of the 

Rule 65 bond requirement was error because it did not make 

findings as to the Beneficiaries' financial ability (or 

inability) to post the bond. We will thus reverse the district 

court's order in this regard and remand for reconsideration. 

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