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362.1-504 Partner's transferable interest subject to charging order.
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This section provides the exclusive remedy by which the judgment creditor of a
partner or the transferee of a partner may satisfy a judgment out of the judgment
debtor's transferable interest.
On application to a court of competent jurisdiction by a judgment creditor of a
partner or a partner's transferee, a court may charge the transferable interest of the
judgment debtor with payment of the unsatisfied amount of the judgment. To the
extent so charged, the judgment creditor has only the rights of a transferee and shall
have no right to participate in the management of or to cause the dissolution of the
partnership. The court may appoint a receiver of the share of the distributions due or
to become due to the judgment debtor in respect of the partnership and make all
other orders, directions, accounts, and inquiries the judgment debtor might have
made or which the circumstances of the case may require to give effect to the
charging order.
A charging order constitutes a lien on and the right to receive distributions made
with respect to the judgment debtor's transferable interest in the partnership.
The court may order a foreclosure of the interest subject to the charging order at any
time. The purchaser at the foreclosure sale has the rights of a transferee. A charging
order does not of itself constitute an assignment of the transferable interest.
At any time before foreclosure, an interest charged may be redeemed:
(a) By the judgment debtor;
(b) With property other than partnership property, by one (1) or more of the other
partners; or
(c) With partnership property, by one (1) or more of the other partners with the
consent of all of the partners whose interests are not so charged.
This subchapter does not deprive a partner or a partner's transferee of a right under
exemption laws with respect to the partner's or transferee's interest in the
partnership.
The partnership is not a necessary party to an application for a charging order.
Service of the charging order on a partnership may be made by the court granting
the charging order or as the court may otherwise direct.
Effective: July 15, 2010
History: Repealed and reenacted 2010 Ky. Acts ch. 51, sec. 149, effective July 15,
2010; and amended ch. 133, sec. 56, effective July 15, 2010. -- Amended 2007 Ky.
Acts ch. 137, sec. 149, effective June 26, 2007. -- Created 2006 Ky. Acts ch. 149,
sec. 45, effective July 12, 2006.
Legislative Research Commission Note (7/15/2010). 2010 Ky. Acts ch. 51, sec. 183,
provides, "The specific textual provisions of Sections 1 to 178 of this Act which
reflect amendments made to those sections by 2007 Ky. Acts ch. 137 shall be deemed
effective as of June 26, 2007, and those provisions are hereby made expressly
retroactive to that date, with the remainder of the text of those sections being
unaffected by the provisions of this section."
Legislative Research Commission Note (7/15/2010). This section was amended by
2010 Ky. Acts ch. 133, and repealed and reenacted by 2010 Ky. Acts ch. 51.
Pursuant to Section 184 of Acts ch. 51, it was the intent of the General Assembly that
the repeal and reenactment not serve to void the amendment, and these Acts do not
appear to be in conflict; therefore, they have been codified together.
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