47-34A-504. Rights of creditor.

273 words·~1 min read·/sd/title-47/chapter-47-34/47-34a-504

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 of a limited liability company or of a member's transferee, and following notice to the limited liability company of such application, a court having jurisdiction may charge the distributional interest of the judgment debtor to satisfy the judgment.

(b)A charging order constitutes a lien on the judgment debtor's distributional interest.

(c)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 that a judgment creditor of a member's distributional interest or a member's assignee may use to satisfy a judgment out of the judgment debtor's interest in a limited liability company. No other remedy, including foreclosure on the member's distributional interest or a court order for directions, accounts, and inquiries that the debtor, member might have made, is available to the judgment creditor attempting to satisfy the judgment out of the judgment debtor's interest in the limited liability company.

(f)No creditor of a member or a member's assignee has any right to obtain possession of, or otherwise exercise legal or equitable remedies with respect to, the property of the company.

(g)This section applies to single member limited liability companies in addition to limited liability companies with more than one member.