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Bankruptcy Corporate Entities Regulation

Current Issues In Enforcing Judgments Against LLCs

When a creditor obtains a judgment against a debtor, the debtor’s assets are sometimes held in membership interests in an LLC, which presents challenges for the creditor seeking recovery. The Uniform LLC Law provided for a charging order in such instances. Although the precise terms of each state’s LLC laws vary, some version of the charging order procedure is available in all states.

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When a creditor obtains a judgment against a debtor, the debtor’s assets are sometimes held in membership interests in a limited liability company, which presents challenges for the creditor seeking recovery. The Uniform Limited Liability Company Act (the Uniform LLC Law) provided for a charging order in such instances. Although the precise terms of each state’s LLC laws vary, some version of the charging order procedure is available in all states.

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