Montana Code 35-8-705. Rights of judgment creditor
35-8-705. Rights of judgment creditor. (1) On application to a court of competent jurisdiction by any judgment creditor of a member, the court may charge the distributional interest of the member with payment of the unsatisfied amount of judgment, with interest. To the extent charged, the judgment creditor has only the rights of an assignee of the distributional interest. This chapter does not deprive a member of the benefit of any exemption laws applicable to a distributional interest.
Terms Used In Montana Code 35-8-705
- Court: includes every court having jurisdiction in the case. See Montana Code 35-8-102
- Distributional interest: means all of a member's interest in the distributions of a limited liability company. See Montana Code 35-8-102
- 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
- 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 who has been admitted to membership in a limited liability company, as provided in 35-8-703, and who has not dissociated from the limited liability company. See Montana Code 35-8-102
- Operating agreement: means an agreement, including amendments, as to the conduct of the business and affairs of a limited liability company and the relations among the members, managers, and the company that is binding upon all of the members. See Montana Code 35-8-102
- Property: means real and personal property. See Montana Code 1-1-205
(2)The court may appoint a receiver of the share of the distributions due or to become due to a judgment debtor and make all other orders, directions, accounts, and inquiries that the judgment debtor may have made or that the circumstances require to give effect to the charging order.
(3)A charging order constitutes a lien on the judgment debtor’s distributional interest. The court may order a foreclosure of a lien on a distributional interest subject to the charging order at any time. A purchaser of the distributional interest at a foreclosure sale has the rights of a transferee.
(4)At any time before foreclosure, a distributional interest that is charged may be redeemed:
(a)by the judgment debtor;
(b)by one or more of the other members with property other than the company’s; or
(c)with the company’s property if permitted by the operating agreement.
(5)This section provides the exclusive remedy by which a judgment creditor of a member or a transferee may satisfy a judgment out of the judgment debtor’s distributional interest in a limited liability company.