Ohio Code 1706.342 – Charging order relating to judgments
(A) On application to a court of competent jurisdiction by any judgment creditor of a member or assignee, the court may charge the membership interest of the judgment debtor with payment of the unsatisfied amount of the judgment with interest. To the extent so charged and after the limited liability company has been served with the charging order, the judgment creditor has only the right to receive any distribution or distributions to which the judgment debtor would otherwise be entitled in respect of the membership interest.
Terms Used In Ohio Code 1706.342
- Distribution: means a transfer of money or other property from a limited liability company, or a series thereof, to another person on account of a membership interest. See Ohio Code 1706.01
- 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
- 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 has been admitted as a member of a limited liability company under section 1706. See Ohio Code 1706.01
- Membership interest: means a member's right to receive distributions from a limited liability company or series thereof. See Ohio Code 1706.01
- Property: means real and personal property. See Ohio Code 1.59
(B) After the limited liability company is served with a charging order, the limited liability company or any member shall be entitled to pay to or deposit with the clerk of the court so issuing the charging order any distribution or distributions to which the judgment debtor would otherwise be entitled in respect of the charged membership interest, and the payment or deposit shall discharge the limited liability company and the judgment debtor from liability for the amount so paid or deposited and any interest that might accrue thereon. Upon receipt of the payment or deposit, the clerk of the court shall notify the judgment creditor of the receipt of the payment or deposit. The judgment creditor shall, after any payment or deposit into the court, petition the court for payment of so much of the amount paid or deposited as may be necessary to pay the judgment creditor’s judgment. To the extent the court has excess amounts paid or deposited on hand after the payment to the judgment creditor, the excess amounts paid or deposited shall be distributed to the judgment debtor, and the charging order shall be extinguished. The court may, in its discretion, order the clerk to deposit, pending the judgment creditor’s petition, any money paid or deposited with the clerk, in an interest bearing account at a bank authorized to receive deposits of public funds.
(C) A charging order constitutes a lien on the judgment debtor’s membership interest.
(D) Subject to division (C) of this section, both of the following apply:
(1) A judgment debtor that is a member retains the rights of a member and remains subject to all duties and obligations of a member.
(2) A judgment debtor that is an assignee retains the rights of an assignee and remains subject to all duties and obligations of an assignee.
(E) This chapter does not deprive any member or assignee of the benefit of any exemption laws applicable to the member’s or assignee’s membership interest.
(F) This section provides the sole and exclusive remedy by which a judgment creditor of a member or assignee may satisfy a judgment out of the judgment debtor’s membership interest, and the judgment creditor shall have no right to foreclose, under this chapter or any other law, upon the charging order, the charging order lien, or the judgment debtor’s membership interest. A judgment creditor of a member or assignee has no right to obtain possession of, or otherwise exercise legal or equitable remedies with respect to, the judgment debtor’s membership interest or the property of a limited liability company. Court orders for actions or requests for accounts and inquiries that the judgment debtor might have made to the limited liability company are not available to a judgment creditor attempting to satisfy the judgment out of the judgment debtor’s membership interest and may not be ordered by a court.