Delaware Code Title 6 Sec. 15-504 – Partner’s economic interest subject to charging order
(a) On application by a judgment creditor of a partner or of a partner’s transferee, a court having jurisdiction may charge the economic interest of the judgment debtor to satisfy the judgment. To the extent so charged, the judgment creditor has only the right to receive any distribution or distributions to which the judgment debtor would otherwise have been entitled in respect of such economic interest.
Terms Used In Delaware Code Title 6 Sec. 15-504
- Attachment: A procedure by which a person's property is seized to pay judgments levied by the court.
- Distribution: means a transfer of money or other property from a partnership to a partner in the partner's capacity as a partner or to a transferee of all or a part of a partner's economic interest. See Delaware Code Title 6 Sec. 15-101
- Economic interest: means a partner's share of the profits and losses of a partnership and the partner's right to receive distributions. See Delaware Code Title 6 Sec. 15-101
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
- Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
- Garnishment: Generally, garnishment is a court proceeding in which a creditor asks a court to order a third party who owes money to the debtor or otherwise holds assets belonging to the debtor to turn over to the creditor any of the debtor
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Lien: A claim against real or personal property in satisfaction of a debt.
- Partner: means a person who is admitted to a partnership as a partner of the partnership. See Delaware Code Title 6 Sec. 15-101
- Partnership: means an association of 2 or more persons formed under § 15-202 of this title, predecessor law or comparable law of another jurisdiction to carry on any business, purpose or activity. See Delaware Code Title 6 Sec. 15-101
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Property: means all property, real, personal or mixed, tangible or intangible, or any interest therein. See Delaware Code Title 6 Sec. 15-101
(b) A charging order constitutes a lien on the judgment debtor’s economic interest in the partnership.
(c) This chapter does not deprive a partner or a partner’s transferee of a right under exemption laws with respect to the judgment debtor’s economic interest in the partnership.
(d) The entry of a charging order is the exclusive remedy by which a judgment creditor of a partner or of a partner’s transferee may satisfy a judgment out of the judgment debtor’s economic interest in the partnership and attachment, garnishment, foreclosure or other legal or equitable remedies are not available to the judgment creditor.
(e) No creditor of a partner or of a partner’s transferee shall have any right to obtain possession of, or otherwise exercise legal or equitable remedies with respect to, the property of the partnership.
(f) The Court of Chancery shall have jurisdiction to hear and determine any matter relating to any such charging order.
72 Del. Laws, c. 151, § ?1; 72 Del. Laws, c. 390, § ?19; 75 Del. Laws, c. 50, §§ ?5-11; 79 Del. Laws, c. 75, § ?1;