§ 48-2c-1103. Rights of creditor of member.

(1)

(a) On application to a court of competent jurisdiction by any judgment creditor of a member or of a member's assignee, the court may charge the interest in the company of the member or assignee with payment of the unsatisfied amount of the judgment plus interest.

(b) A court charging the interest of a member or assignee under Subsection (1)(a) may then or later appoint a receiver of the share of distributions due or to become due to the judgment debtor in respect of the interest in the company.

(c) A judgment creditor and receiver under this section shall have only the rights of an assignee.

(d) A court may make all other orders, directions, accounts, and inquiries a judgment debtor might make or that the circumstances of the case may require.

(2)

(a) A charging order constitutes a lien on the judgment debtor's interest in the company.

(b) A court may order a foreclosure of the interest subject to a charging order entered under this section at any time.

(c) The purchaser at a foreclosure sale under Subsection (2)(b) has only the rights of an assignee if there are other members in the company.

(d) Notwithstanding Subsection (2)(c), if the member whose interest is charged under this section is the sole member of the company when the charging order was entered:

(i) the purchaser at a foreclosure sale acquires all rights of the member, including voting rights; and

(ii) the member is considered to have consented to the admission of the purchaser as a member of the company.

(3) Unless otherwise provided in the articles of organization or operating agreement for the company, at any time before foreclosure an interest charged may be redeemed:

(a) by the judgment debtor;

(b) with property other than company property, by one or more of the other members; or

(c) by the company with the consent of all of the members whose interests are not so charged.

(4) This section does not deprive a member of a right under exemption laws with respect to the member's interest in a company.

(5) This section provides the exclusive remedy by which a judgment creditor of a member or a member's assignee may satisfy a judgment out of the judgment debtor's interest in a company.

(6) No creditor of a member shall have any right to obtain possession of, or otherwise exercise legal or equitable remedies with respect to, the property of the company.

Amended by Chapter 141, 2005 General Session