Sec. 30-20. Rights of creditor.

408 words·~2 min read·/il/chapter-805/act-180/30-20

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(a)On application by a judgment creditor of a member or transferee, a court may enter a charging order against the distributional interest of the judgment debtor for the unsatisfied amount of the judgment. A charging order constitutes a lien on a judgment debtor's distributional interest and requires the limited liability company to pay over to the person to which the charging order was issued any distribution that would otherwise be paid to the judgment debtor. A charging order grants no other rights with respect to the assets or affairs of the company.

(b)To the extent necessary to effectuate the collection of distributions pursuant to a charging order in effect under subsection (a), the court may:

(1)appoint a receiver of the distributions subject to the charging order, with the

power to make all inquiries the judgment debtor might have made; and

(2)make all other orders necessary to give effect to the charging order.

(c)At any time the court may foreclose the lien and order the sale of the distributional interest. The purchaser at the foreclosure sale obtains only the distributional interest, does not thereby become a member, and is subject to Section 30-10.

(d)At any time before foreclosure under subsection (c), the member or transferee whose distributional interest is subject to a charging order under subsection

(a)may extinguish the charging order by satisfying the judgment and filing a certified copy of the satisfaction with the court that issued the charging order.

(e)At any time before foreclosure under subsection (c), a limited liability company or one or more members whose distributional interests are not subject to the charging order may satisfy the judgment and thereby succeed to the rights of the judgment creditor, including the charging order.

(f)This Act does not deprive any member or transferee of the benefit of any exemption laws applicable to the member's or transferee's distributional interest.

(g)This Section provides the exclusive remedy by which a person seeking to enforce a judgment against a member or transferee may, in the capacity of judgment creditor, satisfy the judgment from the judgment debtor's distributional interest. If and to the extent that other law permits a judgment creditor to obtain a lien against the distributional interest or other rights of a member or transferee of a member, the lien shall be treated as a charging order subject to all the provisions of this Section.