48-2c-1103 - Rights of creditor of member. - Utah Statutes

48-2c-1103. Rights of creditor of member.
(1) (a) On application to a court of competent jurisdiction by any judgment creditor of amember or of a member's assignee, the court may charge the interest in the company of themember 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) maythen or later appoint a receiver of the share of distributions due or to become due to the judgmentdebtor in respect of the interest in the company.
(c) A judgment creditor and receiver under this section shall have only the rights of anassignee.
(d) A court may make all other orders, directions, accounts, and inquiries a judgmentdebtor 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 thecompany.
(b) A court may order a foreclosure of the interest subject to a charging order enteredunder this section at any time.
(c) The purchaser at a foreclosure sale under Subsection (2)(b) has only the rights of anassignee if there are other members in the company.
(d) Notwithstanding Subsection (2)(c), if the member whose interest is charged underthis 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 votingrights; and
(ii) the member is considered to have consented to the admission of the purchaser as amember of the company.
(3) Unless otherwise provided in the articles of organization or operating agreement forthe 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 socharged.
(4) This section does not deprive a member of a right under exemption laws with respectto the member's interest in a company.
(5) This section provides the exclusive remedy by which a judgment creditor of amember or a member's assignee may satisfy a judgment out of the judgment debtor's interest in acompany.
(6) No creditor of a member shall have any right to obtain possession of, or otherwiseexercise legal or equitable remedies with respect to, the property of the company.

Amended by Chapter 141, 2005 General Session