2020 Georgia Code
Title 14 - Corporations, Partnerships, and Associations
Chapter 11 - Limited Liability Companies
Article 5 - Limited Liability Company Interests; Admission of Members
§ 14-11-504. Rights of Judgment Creditor
- On application to a court of competent jurisdiction by any judgment creditor of a member or of any assignee of a member, the court may charge the limited liability company interest of the member or such assignee with payment of the unsatisfied amount of the judgment with interest.To the extent so charged, the judgment creditor has only the rights of an assignee of the limited liability company interest.This chapter does not deprive any member of the benefit of any exemption laws applicable to his or her limited liability company interest.
- The remedy conferred by this Code section shall not be deemed exclusive of others which may exist, including, without limitation, the right of a judgment creditor to reach the limited liability company interest of the member by process of garnishment served on the limited liability company, provided that, except as otherwise provided in the articles of organization or a written operating agreement, a judgment creditor shall have no right under this chapter or any other state law to interfere with the management or force dissolution of a limited liability company or to seek an order of the court requiring a foreclosure sale of the limited liability company interest.
(Code 1981, §14-11-504, enacted by Ga. L. 1993, p. 123, § 1; Ga. L. 2009, p. 108, § 7/HB 308.)
Law reviews.- For annual survey on business associations, see 61 Mercer L. Rev. 45 (2009). For article, "The Georgia LLC Act Comes of Age," see 16 (No. 1) Ga. St. B. J. 20 (2010). For annual survey of business associations, see 67 Mercer L. Rev. 15 (2015). For article, "2015 Georgia Corporation and Business Organization Case Law Developments," see 21 Ga. St. B. J. 30 (Apr. 2016).
JUDICIAL DECISIONS
Charging order fell within disposition of property provision requiring bond.
- Trial court did not abuse the court's discretion in requiring that the appellant post a supersedeas bond because the charging order against the appellant fell within the disposition-of-property provision of O.C.G.A. § 5-6-46(a) and the appellee was entitled to a supersedeas bond to secure the appellee's use of that property for purposes of the charging order. Gaslowitz v. Stabilis Fund I, LP, 331 Ga. App. 152, 770 S.E.2d 245 (2015).
Charging order did not give creditor rights against LLC assets.
- Judgment creditor did not have standing to set aside allegedly fraudulent transfers made by non-judgment debtor limited liability companies (LLCs), although the creditor had charging orders against the LLCs under O.C.G.A. § 14-11-504(a); the charging orders did not give the creditor any rights against the assets of the LLCs. Merrill Ranch Props., LLC v. Austell, 336 Ga. App. 722, 784 S.E.2d 125 (2016).
No accounting required.
- Portion of the trial court's order requiring an accounting of a limited liability company's assets was reversed because the judgment creditor did not show how an accounting of the company's assets would ensure that the charging order was honored, or why, as a judgment creditor, the creditor was entitled to such relief against the company. Gaslowitz v. Stabilis Fund I, LP, 331 Ga. App. 152, 770 S.E.2d 245 (2015).
Charge only against unsatisfied amount.
- Charging order cannot extend past the satisfaction of the underlying judgment because, by definition, the charge can only be against the unsatisfied amount of the judgment. Gaslowitz v. Stabilis Fund I, LP, 331 Ga. App. 152, 770 S.E.2d 245 (2015).
Specific amount not required on date charging order issued.
- O.C.G.A. § 14-11-504(a) does not reasonably require that, as a prerequisite to the issuance of a charging order, the judgment creditor establish the specific amount of the judgment that remains unpaid on the date the charging order is issued. Gaslowitz v. Stabilis Fund I, LP, 331 Ga. App. 152, 770 S.E.2d 245 (2015).
Court that entered underlying judgment may enter the charging order.
- Under O.C.G.A. § 14-11-504(a), an order charging a member's interest in a limited liability company with payment of an unsatisfied judgment need not be initiated as a separate action but may be issued by the court that entered the underlying judgment; it was not necessary that the court have jurisdiction over the limited liability company. Mahalo Invs. III, LLC v. First Citizens Bank & Trust Co., 330 Ga. App. 737, 769 S.E.2d 154 (2015).
