What purpose does an asset-freezing injunction serve?

An asset-freezing injunction serves to ensure the availability of certain assets for future claims. This type of injunction is typically sought in civil litigation when there is a concern that a defendant might dissipate or conceal their assets before a judgment can be made. The primary purpose is to preserve the status quo by preventing the defendant from selling, transferring, or otherwise reducing the value of assets that may be needed to satisfy a judgment later. This prevents scenarios where a winning party in a legal dispute would find that the defendant has no assets left to satisfy the financial obligations that may arise from the court’s decision.

In contrast to other options, an asset-freezing injunction is not about preventing the sale of a business outright, imposing penalties, or guaranteeing contract profits, which do not align with this specific legal mechanism's goal. Rather, it is a protective measure aimed at securing the assets that may be necessary for a fair resolution of a dispute.