Kentucky Statutes 272A.6-050 – Charging order
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(1) This section provides the exclusive remedy by which the judgment creditor of a member or the assignee of a member may satisfy a judgment out of the judgment debtor’s limited financial rights in a limited cooperative association.
(2) On application to a court of competent jurisdiction by a judgment creditor of a member or a member’s assignee, a court may charge the judgment debtor’s financial rights in the association with payment of the unsatisfied amount of the judgment. To the extent so charged, the judgment creditor has only the rights of a transferee and shall have no right to participate in the management or to cause the dissolution of the association. The court may appoint a receiver of the share of the distributions due or to become due to the judgment debtor in respect of the financial rights and make all other orders, directions, accounts, and inquiries the judgment debtor might have made or which the circumstances of the case may require to give effect to the charging order.
(3) A charging order constitutes a lien on and the right to receive distributions made with respect to the judgment debtor’s financial rights. A charging order does not of itself constitute an assignment of the financial rights.
(4) The court may order a foreclosure upon the financial rights subject to the charging order at any time. The purchaser of the financial rights at the foreclosure sale has the rights of a transferee. At any time before foreclosure, the charged financial rights may be redeemed:
(a) By the judgment debtor;
(b) With property other than property of the association, by one (1) or more of the other members; and
(c) With association property, by the association with the consent of all members whose financial rights are not so charged.
(5) This section does not deprive a member or a member’s assignee of the benefit of any exemption laws applicable to the member’s or assignee’s financial rights.
(6) The association is not a necessary part to an application for a charging order.
Service of the charging order on an association may be made by the court granting the charging order or as the court should otherwise direct.
(7) This section does not apply to the enforcement of a judgment by a limited cooperative association against a member of that association.
(8) This section shall apply to the issuance of a charging order against the interest of a member or assignee of a member of a foreign limited cooperative association.
Effective:June 29, 2017
History: Amended 2017 Ky. Acts ch. 193, sec. 9, effective June 29, 2017. — Created 2012 Ky. Acts ch. 160, sec. 49, effective July 12, 2012.
(2) On application to a court of competent jurisdiction by a judgment creditor of a member or a member’s assignee, a court may charge the judgment debtor’s financial rights in the association with payment of the unsatisfied amount of the judgment. To the extent so charged, the judgment creditor has only the rights of a transferee and shall have no right to participate in the management or to cause the dissolution of the association. The court may appoint a receiver of the share of the distributions due or to become due to the judgment debtor in respect of the financial rights and make all other orders, directions, accounts, and inquiries the judgment debtor might have made or which the circumstances of the case may require to give effect to the charging order.
Terms Used In Kentucky Statutes 272A.6-050
- Cooperative: means a limited cooperative association or an entity organized under any cooperative law of any jurisdiction. See Kentucky Statutes 272A.1-020
- Financial rights: means the right to participate in allocations and distributions as provided in Subchapters 10 and 12 of this chapter, but does not include rights or obligations under a marketing contract governed by Subchapter 7 of this chapter. See Kentucky Statutes 272A.1-020
- 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
- Foreign: when applied to a corporation, partnership, limited partnership, business trust, statutory trust, or limited liability company, includes all those incorporated or formed by authority of any other state. See Kentucky Statutes 446.010
- 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.
- Member: means a person that is admitted as a patron member or investor member, or both, in a limited cooperative association. See Kentucky Statutes 272A.1-020
(3) A charging order constitutes a lien on and the right to receive distributions made with respect to the judgment debtor’s financial rights. A charging order does not of itself constitute an assignment of the financial rights.
(4) The court may order a foreclosure upon the financial rights subject to the charging order at any time. The purchaser of the financial rights at the foreclosure sale has the rights of a transferee. At any time before foreclosure, the charged financial rights may be redeemed:
(a) By the judgment debtor;
(b) With property other than property of the association, by one (1) or more of the other members; and
(c) With association property, by the association with the consent of all members whose financial rights are not so charged.
(5) This section does not deprive a member or a member’s assignee of the benefit of any exemption laws applicable to the member’s or assignee’s financial rights.
(6) The association is not a necessary part to an application for a charging order.
Service of the charging order on an association may be made by the court granting the charging order or as the court should otherwise direct.
(7) This section does not apply to the enforcement of a judgment by a limited cooperative association against a member of that association.
(8) This section shall apply to the issuance of a charging order against the interest of a member or assignee of a member of a foreign limited cooperative association.
Effective:June 29, 2017
History: Amended 2017 Ky. Acts ch. 193, sec. 9, effective June 29, 2017. — Created 2012 Ky. Acts ch. 160, sec. 49, effective July 12, 2012.