What Trustees Should Know: “Void” Judgment Motions Must Be Timely
For years, one question has lingered in bankruptcy and receivership matters: If a judgment is truly “void,” can it be challenged at any time?
On January 20, 2026, the U.S. Supreme Court gave a clear answer: No.
In Coney Island Auto Parts Unlimited, Inc. v. Burton, the Court held that motions to vacate allegedly void judgments under Rule 60(b)(4) must still be brought within a reasonable time under Rule 60(c)(1)—there is no unlimited do-over.
For trustees and receivers responsible for monetizing estate assets, this is an important and welcome development.
A Familiar Fact Pattern
The case arose out of a common enforcement scenario. A bankruptcy estate obtained a default judgment based on mailed service that was later alleged to be defective. The judgment debtor did nothing for six years. Only after a U.S. Marshal seized funds did the debtor move to vacate the judgment, arguing it was void ab initio and therefore immune from time limits. Every court to consider the issue including the Supreme Court rejected that argument.
The Key Holding
Justice Alito, writing for the Court, focused on the text of Rule 60(c)(1): “A motion under Rule 60(b) must be made within a reasonable time.” A motion claiming a judgment is “void” is still a Rule 60(b) motion.
There is no carve-out.
The Court squarely rejected the idea that labeling a judgment “void” suspends all
deadlines. Finality still matters.
Why This Matters For Trustees And Receivers
Judgments Age Better Than Defendants Think: Old judgments are no longer automatically vulnerable to late “voidness” attacks.
Delay Has Consequences: Judgment debtors who sit on their hands despite demand letters or enforcement efforts may lose the ability to challenge service years later.
Enforcement Creates Leverage: The Court made clear that “reasonable time” is flexible, but not endless. Waiting until enforcement may be reasonable; waiting indefinitely is not.
Diligence Still Matters: At Strategic Liquidity Fund, when we purchase default judgments from trustees and receivers, we spend significant time doing due diligence services and notice. Coney Island confirms that doing this work upfront meaningfully protects value.
Where SLFAQ Can Help: Immediate Liquidity For Enforcement Assets
At Strategic Liquidity Fund, we have extensive experience acquiring and collecting on portfolios of default judgments. If you’re administering an Estate or Receivership that includes default judgments we can provide a quick, no-obligation assessment and, where appropriate, offer a bid to purchase. Contact us today.