[§428-504] Rights of creditors.
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/hi/chapter-428/428-504A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
[§428-504] Rights of creditors.
(a)On application by a judgment creditor of a member of a limited liability company or a member's transferee, a court having jurisdiction may order that the distributional interest of the judgment debtor be used to satisfy the judgment. The court may appoint a receiver to carry out the provisions of the charging order.
(b)A charging order constitutes a lien on the judgment debtor's distributional interest. The court may order a foreclosure of a lien on a distributional interest subject to the charging order at any time. A purchaser at the foreclosure sale has the rights of a transferee.
(c)At any time before foreclosure, a distributional interest in a limited liability company which is charged may be redeemed:
(1)By the judgment debtor;
(2)With property other than the company's property, by one or more of the other members; or
(3)With the company's property, but only if permitted by the operating agreement.
(d)This chapter does not affect a member's right under exemption laws with respect to the member's distributional interest in a limited liability company.
(e)This section provides the exclusive remedy by which a judgment creditor of a member or a transferee may satisfy a judgment out of the judgment debtor's distributional interest in a limited liability company. [L 1996, c 92, pt of §1]