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Will Your Personal Obligations Cause You To Lose Control of Your LLC? LLC Charging Order Update: Vision Marketing Resources, Inc. v. McMillin Group, LLC (Part 2)

December 29, 2015

Vision Marketing Resources, Inc. v. McMillin Group, LLC.

 In Vision Marketing, the court first addressed whether it could issue a charging order against a non-Kansas LLC over which it did not have jurisdiction. There was no Kansas case law on this issue, so the court looked at several cases in which other state’s appellate courts held that the court need not have jurisdiction over the foreign LLC (i.e., those formed elsewhere) in order to issue a charging order against the interests of its members: for example, the Illinois Appellate Court found that a court only needs to have jurisdiction over the judgment debtor to enter charging orders against the judgment debtor’s interest, because charging orders on distributional interests do not affect the rights or interests of the LLC; and in Georgia, the Court of Appeals has likewise held that it is only necessary for a court to have jurisdiction over the judgment debtor to have the authority to enter charging orders against the judgment debtor’s interest because the LLC has no right or direct interest that is affected by the charging order.… Read the rest

Will Your Personal Obligations Cause You To Lose Control of Your LLC? LLC Charging Order Update: Vision Marketing Resources, Inc. v. McMillin Group, LLC

December 19, 2015

In our previous blog series on single-member LLCs and creditors’ rights (available here), we discussed charging order protection and courts’ application of the same to single-member LLCs. As we mentioned, the obvious purpose of charging order is to protect other members of an LLC from having involuntarily to share governance responsibilities with someone they did not choose or from having to accept a creditor of another member as a co-manager—that is, to protect the autonomy of the original members and their ability to manage their own enterprise.… Read the rest

All postings are intended to be planning tools to familiarize readers with some of the high-level issues discussed therein. No posting is intended to be a comprehensive discussion and additional details should be discussed with your transaction planners including attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. This article should not be treated as legal advice to any person or entity.