Charging Orders and the New Uniform Limited Partnership Act Dispelling Rumors of Disaster

6 Pages Posted: 17 Sep 2006

See all articles by Daniel S. Kleinberger

Daniel S. Kleinberger

William Mitchell College of Law

Carter G. Bishop

Suffolk University Law School

Thomas Geu

University of South Dakota Law School

Abstract

Last year, an article published in this magazine focused on the charging order as "the Exclusive Remedy Against a Partnership Interest" and announced the "[s]hocking [r]evelation" that ULPA (2001)--the new Uniform Limited Partnership Act--undermines the "exclusive remedy" limitation on charging orders. The authors asserted categorically that, "from an asset protection perspective, the 2001 Act is considerably less protective of a partner's partnership interest than the 1976 Act." Elizabeth M. Schurig & Amy P. Jetel, A Charging Order Is the Exclusive Remedy Against a Partnership Interest: Fact or Fiction?, Prob. & Prop. 57, 58 (Nov./Dec. 2003).

As this article will show, the rumors of disaster are unfounded, and ULPA (2001)'s provisions on charging orders are nothing to be feared. To support this calming assertion, this article will explain: (1) the history and purpose of the charging order remedy, (2) the consequences of charging order foreclosure (including the possibility of redemption), and, most importantly from a practical perspective, (3) the current state of the law governing charging orders, foreclosure, and limited partnerships. Like the November/December article, this article leaves aside the separate issues that arise when secured creditors exercise rights and remedies under UCC Article 9.

Keywords: charging order, limited liability company, LLC, partnership, corporation, taxation

Suggested Citation

Kleinberger, Daniel S. and Bishop, Carter G. and Geu, Thomas, Charging Orders and the New Uniform Limited Partnership Act Dispelling Rumors of Disaster. Probate and Property, Vol. 18, July/August 2004. Available at SSRN: https://ssrn.com/abstract=930407

Daniel S. Kleinberger

William Mitchell College of Law ( email )

875 Summit Ave
St. Paul, MN 55105-3076
United States

Carter G. Bishop (Contact Author)

Suffolk University Law School ( email )

120 Tremont Street
Boston, MA 02108-4977
United States
617-573-8534 (Phone)

Thomas Geu

University of South Dakota Law School ( email )

414 E. Clark Street
Vermillion, SD 57069
United States

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