What to know about asset freeze on a marketplace account

TL;DRAn asset freeze on a marketplace account is a federal court order – typically issued without prior notice to the seller – that directs Amazon or another platform to hold all funds in the account and block further disbursements. It arrives as part of a Schedule A complaint in which a brand owner names large numbers of online sellers as defendants, often in the same filing. Being named does not mean losing: the freeze is a procedural step at the start of the case, not a final judgment, and the realistic options depend on what the order says, which account is affected, and how quickly the seller responds.

The day a seller discovers a frozen marketplace account is rarely the day the case started. In many matters we handle, the federal complaint was filed weeks earlier, the temporary restraining order was granted on an ex parte basis, and Amazon quietly applied the hold before any notice reached the seller. The account balance is frozen, new disbursements stop, and the listings may be taken down – all without a single prior communication from the plaintiff or the court. That is exactly the design of the SAD scheme, and it is why the first hours after discovery matter so much.

This hub answers the questions sellers ask most urgently on that first day. It covers what the freeze actually is, how the procedural path works, and where the realistic decision points lie.

What is an asset freeze on a marketplace account, and how does it get there?

A marketplace asset freeze is a court-ordered hold on the funds, proceeds, and assets held by a third-party platform on behalf of a seller, issued as part of civil litigation – most commonly a Schedule A trademark or copyright infringement action filed in a US federal district court.

The mechanics work like this. A brand owner, or a litigation firm working on the brand's behalf, files a complaint naming a large number of sellers – sometimes dozens, sometimes hundreds – as "Schedule A Defendants." The complaint is accompanied by a motion for a temporary restraining order (TRO) and, almost always, a motion for an asset-restraining order or a Mareva-style injunction directed at the platform. Because these motions are filed ex parte (without telling the defendants), the court can grant them the same day or within a matter of days. The brand owner then serves the order on Amazon, and Amazon applies the freeze, typically without notifying the seller in advance.

What gets frozen varies by order. Some orders freeze only the proceeds held at the time the order is served. Others freeze the entire account balance plus any future receivables until the court modifies or lifts the order. Some extend to related payment accounts outside the platform. The scope is defined by the order itself, which is why reading the actual TRO text is the first task in any matter we review.

The SAD scheme is the common name for this litigation pattern. It has been used across federal courts in Illinois, New York, Florida, and California, among others. The Northern District of Illinois in Chicago has historically been a high-volume venue for these filings, though the jurisdictional picture is broader than any single courthouse. A seller who receives notice of a case filed in a district where neither the seller nor any of its business is located will face a personal-jurisdiction argument that can be worth pursuing early.

For a full picture of how the case structure works before the freeze arrives, our Schedule A TRO defense complete guide for sellers covers the litigation pattern from complaint to resolution.

How does the TRO and asset-freeze process actually unfold?

The procedural sequence in a Schedule A case follows a compressed timeline, and most of the leverage available to a seller sits early in that sequence.

The plaintiff files the complaint and simultaneously moves for a TRO with asset freeze. The court may grant the TRO on an ex parte basis – without hearing from the defendants – often within a few days of filing. Federal rules generally require that an ex parte TRO expire within 14 days unless the court extends it or converts it to a preliminary injunction, though in practice courts regularly grant extensions and the effective hold period can be considerably longer before a hearing is held.

Once Amazon receives the order, it applies the account hold. The seller may receive an email from Amazon referencing a court order, or may simply notice that disbursements have stopped. At that point, the first constructive notice of the case has arrived, even if no attorney or process server has formally served the seller yet.

The next stage is the preliminary injunction hearing. This is the first real opportunity for a defendant to appear, challenge the order, and argue – on notice – whether the restraint should continue. A preliminary injunction requires the plaintiff to show a likelihood of success on the merits, irreparable harm, a balance of equities in the plaintiff's favor, and that the injunction is in the public interest – a higher standard than the TRO. This is often where the practical outcome is shaped: a defendant who appears, opposes the injunction, and presents a credible defense may negotiate a modification of the freeze or a settlement on materially better terms than a defendant who defaults.

Default is the other path, and it is a serious risk. A seller who does nothing allows the case to proceed to default judgment, which can include a permanent injunction, statutory damages, and – in some cases – a judgment that reaches assets beyond the marketplace account. The intersection of default judgment risk and asset freeze is covered in more detail in our analysis of default judgment in a Schedule A case.

Between the TRO and the preliminary injunction hearing, there is typically a window – measured in weeks, not months – during which a defendant can move to dissolve or modify the TRO, challenge the court's jurisdiction, raise misjoinder if the case improperly bundles unrelated sellers, or open settlement discussions. We regularly see sellers who waited through this window believing the case would resolve itself. It does not.

What are the seller's real decision points after the account is frozen?

A frozen account forces a decision, and the quality of that decision depends on understanding what the options actually cost – in time, fees, and commercial exposure.

The first decision is whether to appear. Appearing in the case – filing a response or a motion – signals that the seller is a live defendant. It stops the default clock and opens the path to modifying or dissolving the freeze. The tradeoff is that appearing commits the seller to active litigation costs. For a seller whose entire Amazon balance is, say, a few thousand dollars, the calculus is different from one with a mid-five-figure or larger hold. The size of the frozen balance matters, but so does the risk profile: a seller who holds inventory on other platforms, runs payment accounts linked to the same entity, or operates under a brand name that could attract further claims has more to protect than the balance alone.

The second decision is whether to challenge jurisdiction. Many Schedule A cases are filed in districts with no real connection to the seller. A seller incorporated in, and operating from, a state with no ties to the filing district has grounds to contest personal jurisdiction. If the challenge succeeds, the case is dismissed or transferred. This is one of the least expensive dispositive arguments available, and we evaluate it in every matter.

The third decision is settlement. Most Schedule A cases settle. The plaintiff's business model in this litigation pattern often depends on volume settlements. A defendant who appears early – before default, before a preliminary injunction is entered – typically settles on better terms than one who defaults and then tries to reopen the judgment. Settlement terms commonly include a license or consent agreement, a release of the frozen funds minus a damages payment, and a permanent injunction against future sales of the alleged infringement. What those terms look like depends on the strength of the defense, the plaintiff's litigation posture, and timing.

The fourth decision point involves the freeze itself. Even if the seller plans to settle, it may be possible to move to modify the asset freeze – for example, to release funds needed for ongoing business operations – while the case is pending. Courts have discretion to narrow an overbroad freeze, and a well-supported motion can release working capital that would otherwise sit idle for months.

What about Amazon-level actions? The asset freeze imposed at Amazon's end is a consequence of the court order; Amazon is following court instructions. The route to releasing the hold runs through the court, not through Seller Central appeals or Account Health escalations. We regularly see sellers lose weeks attempting to work through Amazon's internal channels on a hold that can only be lifted by the court or by the plaintiff's agreement. For comparison, a platform-level hold arising from Amazon's own policies – rather than a court order – works through different channels entirely. Our page on handling a preliminary injunction against a seller on Walmart illustrates how a court-ordered freeze operates across different platforms, including where the release mechanisms differ.

What does the defense actually look like, and what are the realistic outcomes?

Being named in a Schedule A case is not an automatic loss. That is the single most important thing for a seller to understand. The plaintiff filed on what its lawyers believed was sufficient evidence. That evidence can be wrong, incomplete, or based on a test purchase that does not accurately reflect the seller's actual inventory or sourcing. The complaint may misidentify the seller. The infringement allegation may be legally deficient. The court's jurisdiction may be proper or challengeable.

In matters we handle, the first step after reading the TRO is to reconstruct the account and product history: what was sold, when, from what source, and whether the seller had any authorization from the brand or a legitimate supply chain. We then assess the claim itself: is this a trademark case or a copyright case, is the plaintiff's registration valid and in force, and does the alleged infringing product actually fall within the scope of the asserted right. That analysis drives the defense strategy.

If the defense is strong on the merits, the seller may wish to contest the case actively, oppose the preliminary injunction, and negotiate from a position that includes a credible willingness to litigate. If the defense is weaker – or if the commercial cost of prolonged litigation outweighs the expected value of winning – an early settlement that releases the freeze and resolves the case quickly may be the better commercial path. The realistic options are not "fight" or "surrender"; they are a range of positions calibrated to the specific facts and the seller's business priorities.

A typical Schedule A defense engagement – from first review through resolution at settlement or dismissal – takes several months. Cases that go deeper into contested preliminary injunction proceedings or full merits litigation take longer. Exact timelines are a function of the court's docket, the plaintiff's pace, and how much motion practice occurs. What we can say from our practice is that sellers who engage early consistently have more options than those who wait.

One pattern we see often illustrates this. A home-goods seller on Amazon US (winter 2025) discovered a frozen balance when a disbursement failed to arrive. The seller had no prior notice of the litigation. We identified the relevant federal filing, reviewed the TRO, assessed a personal-jurisdiction argument as viable, and opened settlement discussions before the preliminary injunction hearing. The case resolved through a negotiated consent agreement that released the majority of the frozen balance and included a forward-looking license. The seller's ongoing business was not materially disrupted after the initial freeze period. That outcome was possible because the seller moved quickly after discovery.

A contrasting matter involved a software-accessories seller on Amazon US (spring 2025) who waited several weeks after learning of the freeze, believing the case would resolve without their participation. By the time they contacted us, the preliminary injunction had been entered without opposition, and the freeze had been extended indefinitely. The range of options at that stage was narrower, and the settlement terms available were materially less favorable than they would have been had the seller appeared early.

The commercial reality of running a marketplace business makes delays understandable. A frozen balance disrupts cash flow, affects inventory purchasing, and creates uncertainty across the whole operation. But the procedural window in these cases is short, and the cost of inaction compounds quickly.

What happens to inventory and other accounts when the freeze is in place?

An asset freeze on a marketplace account affects the balance held in that account. What happens to inventory in the fulfillment network, to listings, and to linked accounts depends on the specific language of the TRO and any related orders.

Amazon will typically also take down the seller's listings when a TRO is served, consistent with its obligations under the order and its own policies regarding court-ordered enforcement. FBA inventory may remain in Amazon's warehouses during the freeze, but removing it – or receiving proceeds from sales – may be restricted by the order. Whether inventory can be removed or returned during an active freeze is a question the order language controls, and in some cases a separate motion to the court is needed to authorize the movement of physical inventory.

Related accounts present a separate risk. If the seller operates multiple Seller Central accounts, or if linked payment accounts are identified in the TRO, those accounts may be reached by the same order. Plaintiffs in Schedule A cases routinely ask courts to extend the freeze to "all accounts" associated with the seller, and courts often grant this on ex parte application. A seller whose business runs across multiple entities or payment processors should treat the initial freeze as potentially broader than a single account balance.

Outside of the marketplace, the freeze as entered against Amazon does not automatically extend to the seller's bank accounts or other assets. However, if the plaintiff obtains an order specifically directed at other financial institutions, or if the judgment is later enforced against the seller's domestic assets, the exposure is broader. The scope of each order has to be read carefully.

Are there common mistakes sellers make when handling this alone?

Several patterns recur in matters where a seller tried to manage an asset freeze without legal help, and then came to us after the situation worsened.

The most common mistake is attempting to resolve the freeze through Amazon's customer-service or Account Health channels. Amazon is holding the funds under a court order. Its teams do not have authority to release the funds unilaterally; that authority rests with the court or the plaintiff. Time spent on Amazon internal appeals is time not spent on the court filings that can actually move the freeze.

A second mistake is contacting the plaintiff directly – sometimes aggressively – without counsel. Communications from the seller to the plaintiff's attorneys become part of the record and can be used in the case. An unrepresented seller who makes admissions, proposes terms without understanding the standard settlement structure, or sends messages that read as confrontational may make the case harder to resolve. In matters we review after a seller has had initial contact with the plaintiff's side, we often have to work through statements that complicate an otherwise manageable situation.

A third mistake is assuming the case is too small to be worth defending. The plaintiff's goal is often to collect a settlement payment and move on. A seller who does not appear may receive a default judgment that is larger than any settlement the plaintiff would have accepted from a defendant who showed up. The judgment then attaches to the seller's frozen balance and potentially to other assets, and the cost of reopening a default is higher than the cost of appearing the first time.

A fourth issue is misunderstanding the relationship between the civil TRO and the seller's separate contractual relationship with Amazon. The BSA – Amazon's Business Solutions Agreement – governs what Amazon can and cannot do with respect to the seller's funds under its own policies. A court order can require Amazon to freeze funds beyond what the BSA alone would authorize. Understanding which actions flow from the court order and which flow from Amazon's internal policies matters when planning a response.

Related areas

• Schedule A / TRO Defense – federal IP litigation defense for marketplace sellers named as Schedule A defendants
• Account Reinstatement – suspended or deactivated accounts across Amazon and other marketplace surfaces

Frequently asked questions about asset freeze on a marketplace account

How long does resolving asset freeze on a marketplace account usually take on Amazon US?

The timeline depends heavily on which stage the case is at when the seller engages. A case that settles before a preliminary injunction hearing – which is the most common resolution path in Schedule A matters – typically resolves within several weeks to a few months from the date the seller first appears or opens settlement discussions. Cases that contest the preliminary injunction, challenge jurisdiction on motion, or proceed toward a merits hearing take considerably longer. The key variable is when the seller engages: earlier engagement consistently compresses the timeline and preserves more options. An active account freeze can remain in place for the entire duration of the litigation if no motion is made to modify or dissolve it, which is why moving on the freeze specifically – rather than waiting for the whole case to resolve – is often worth the separate effort.

What are the main risks if I handle asset freeze on a marketplace account alone?

The principal risks of handling a Schedule A asset freeze without legal help are procedural. Missing the window to oppose a TRO or preliminary injunction, making unguarded communications with the plaintiff's lawyers, and failing to appear before a default is entered are the three most consequential errors in matters we see. Beyond procedure, an unrepresented seller typically does not know whether the infringement claim is legally sound, whether jurisdiction is challengeable, or what settlement terms are reasonable in the current market for these cases. Acting without that knowledge tends to produce worse settlement terms or, in default cases, a judgment against the seller that far exceeds any settlement payment the plaintiff would have accepted from a represented defendant who appeared early.

Do I need a lawyer for asset freeze on a marketplace account?

Yes, in the strong view of our practice. A Schedule A case is federal civil litigation. The procedural rules, the standards for contesting a TRO or preliminary injunction, and the strategic calculus for settlement all require legal analysis. This is not a seller-support ticket or an Account Health appeal; it is a federal court proceeding that moves on the court's schedule. An attorney who knows this litigation pattern can assess the claim's strength, identify any jurisdictional or joinder defects, and position the seller for the best available outcome. The alternative – proceeding alone – is technically possible but carries meaningful risk of worse outcomes at every stage. Fixed fees and the full scope of work are quoted after a short initial review, so the cost is transparent from the start.

Can a seller recover funds from a frozen marketplace account?

Recovering frozen funds is a realistic goal, but the path runs through the court, not through Amazon. The three main routes are: (1) a motion to modify or dissolve the TRO on the merits – arguing the plaintiff has not met the legal standard for the freeze to continue; (2) a negotiated settlement that includes the release of the frozen balance, minus any agreed damages payment; and (3) a final ruling in the seller's favor if the case goes to a merits hearing. In many matters, a settlement that releases the bulk of the frozen balance is achievable significantly faster than full litigation to judgment. A seller who appears promptly and engages in good-faith settlement discussions is generally in a better position to negotiate the release of funds than one who defaults or delays.

What is the SAD scheme and how does it differ from a regular IP dispute on Amazon?

The SAD scheme – Schedule A Defendants – is a specific federal litigation tactic in which a plaintiff bundles large numbers of online sellers into a single complaint, obtains an ex parte TRO with asset freeze before any defendant receives notice, and uses the freeze as leverage to collect settlement payments. It differs from a standard IP complaint filed through Amazon's Brand Registry or Intellectual Property Complaint system in almost every material respect. An Amazon-side IP complaint is handled administratively through Seller Central, does not freeze funds, and can be appealed through Amazon's internal processes or countered with a counter-notice or retraction request. A Schedule A TRO is a federal court order, freezes funds immediately and without notice, and can only be addressed through federal court proceedings. The two processes require completely different responses, and confusing them – or applying the Amazon-side playbook to a federal court order – is one of the most common and costly mistakes we see in matters that come to us after the seller has already lost time.

About Tutamen

Tutamen is an independent law firm for online marketplace sellers. We represent Amazon, Walmart, Etsy and eBay sellers in account deactivations, frozen-funds recovery, intellectual-property disputes, arbitration and Notices of Dispute, and US federal Schedule A defense, plus EU marketplace regulation. Our work is attorney-led and confidential, with fees quoted up front. We act for founders, brand owners and in-house teams who need a specialist for a marketplace dispute. Our Schedule A practice focuses on early intervention – moving to dissolve or narrow the restraining order, challenging jurisdiction and joinder, and opening settlement on better terms – so that a federal court proceeding does not become a business-ending event. To discuss your situation, email info@tutamenlaw.com.

If a first attempt to address the freeze – whether through Amazon's channels or on your own – has already stalled, a second review can identify what is still open and what the realistic next step is. Email info@tutamenlaw.com with a brief description of the account and the court notice you received.

Disclaimer: This article is general information, not legal advice, and does not create an attorney-client relationship. Marketplace policies and the law change, and every account and case is different. For advice on your situation, contact Tutamen at info@tutamenlaw.com.