This article originally was published in the July 2017 issue
of South Carolina Lawyer.
A "charging order" allows a judgment creditor to
receive a debtor's share of distributions from a limited
liability company (LLC) or a partnership. With the proliferation of
LLCs in the last 20 years, understanding "charging order"
concepts has taken on increased importance. The focus of this
article is to discuss charging orders and issues arising from
charging orders in the context of LLCs.
Illustration of a charging order
Assume a creditor obtains a judgment against a person (the
debtor). The creditor knows or discovers that the person owns an
interest in a limited liability company (LLC) or a partnership. The
creditor can obtain a "charging order" from a court and
deliver the order to the debtor and the LLC/partnership.
