Charging Orders: How Exclusive is Exclusive?
19 Pages Posted: 19 Nov 2014 Last revised: 2 Dec 2014
Date Written: November 17, 2014
Several state LLC, LP and LLP statutes provide charging order protection for these entities which may provide substantial protection from creditors beyond that which available with a corporation. Many of these statutes indicate the charging order is the exclusive remedy available to creditors. Is charging order protection this strong? There are only limited cases on point. Recent case law in this emerging area of judicial development provides a glimpse of how exclusive the charging order currently is. These cases also inform the factors courts look at and approaches a court may take when determining how exclusive the charging order remedy is.
Keywords: LLC, LP, LLP, charging order, exclusive, exclusivity, creditor, protection, corporation, creditors, shield
JEL Classification: K10, K13, K19, K22, K34, K41
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