Current through the 2024 Legislative Session
Section 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.