Case Law

Using TRO Lawsuits to Pull Out Frozen Funds? Amazon Asks Courts to Halt Such Transfers

Amazon found a China-based service provider advertising that it can get frozen Amazon funds released by filing suit in Illinois and cooperating with seller-defendants. Amazon has asked courts in more than two dozen Schedule A cases to halt such transfers. The plaintiff denies collusion; a hearing is set for October 28.

Published: October 22, 2026

What happened

Amazon has recently moved in a number of Northern District of Illinois Schedule A cases to stay “turnover orders,” court orders directing Amazon to transfer frozen seller funds to plaintiffs. Amazon is not a party to these cases.

According to a Legal Newsline report on October 16, Amazon has filed similar motions in more than two dozen Schedule A cases since August, starting with a case brought by NextClimb Investments. Many judges have granted stays, some tying their length to the ruling in the NextClimb case.

What Amazon says

1. Settlements matching frozen balances “to the cent.” According to Legal Newsline, Amazon’s NextClimb motion says some settlement amounts exactly matched the balances Amazon had restrained, and that the asserted registration covers HVAC vent covers while the accused sellers listed DIY Christmas ornament kits and platform boots. Amazon says its review of just four NextClimb cases involves more than $4.67 million from 435 seller accounts paid to plaintiff’s counsel, and that it found “potentially similar activity” involving at least four other plaintiff-side firms.

2. Chinese-language videos and posts. On October 19, Amazon filed a supplement in the NextClimb case before Judge Kennelly (1:26-cv-05593). Amazon says it found Chinese-language posts and an approximately 11-minute video from a China-based service provider called “Amazon Xiao Niu Appeal” describing a “forced-payout business”: filing suits in the Northern District of Illinois, cooperating with seller-defendants, and obtaining court-signed turnover orders to release Amazon seller funds that sellers could not otherwise withdraw. The provider reportedly says it has seventeen outstanding turnover orders.

Notably, Amazon’s filing states that it does not contend the materials necessarily establish a connection between the provider and the plaintiff in this case, and that it has not linked the transactions to particular court orders. Amazon asks the court to direct counsel to address the materials; it does not ask for findings of misconduct.

The plaintiff’s response

On October 20, NextClimb filed a response that strenuously denies any collusion, calling Amazon’s allegations speculation and hearsay from unrelated cases. NextClimb says:

Settlements matching account balances are common in Schedule A cases and were negotiated at arm’s length
It did not know the defendants’ accounts had already been restricted by Amazon for unrelated reasons
It also sells non-slip drawer liners under the same mark, not only HVAC vent covers
It has no connection to the Chinese-language materials Amazon filed

NextClimb asks the court to disregard Amazon’s supplement.

What’s next

According to Amazon’s supplement, Judge Kennelly has set a hearing for October 28, 2026. The court has not ruled on Amazon’s stay motion, and neither side’s account has been tested by the court.

What this means for cross-border sellers

Our assessment:

Be wary of intermediaries promising to “unfreeze” funds through U.S. lawsuits. Amazon is now challenging such turnover orders in court, and the funds may be held. Sellers who take part in such arrangements may face legal risk and may not recover the money.
Payouts from genuine settlements may slow down. With Amazon scrutinizing Schedule A turnovers more closely, even legitimate settlement payments may take longer.
Use legitimate channels for frozen funds. First establish whether the freeze is a platform account restriction or a court order, then have counsel assess appeal, settlement, or defense.

We will follow up after the October 28 hearing.

Sources

Funds frozen and unsure what to do?

First find out whether it is a platform restriction or a court order. Send us the notice and any case number, and we will explain the legitimate options.

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