Tennessee Charging Order Statutes And Opinions
Tennessee Charging Order Statutes
- GENERAL PARTNERSHIPS: T. C. § 61-1-504. Partner's transferable interest subject to charging order
- LIMITED PARTNERSHIPS: T. C. § 61-3-703. Charging order
- LIMITED LIABILITY COMPANIES: T. C. § 48-249-509. Rights of judgment creditor
T. C. § 61-1-504. Partner's transferable interest subject to charging order
(a) On application by a judgment creditor of a partner or of a partner's transferee, a court having jurisdiction may charge the transferable interest of the judgment debtor to satisfy the judgment. 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.
(b) A charging order constitutes a lien on 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.
(c) At any time before foreclosure, an interest charged may be redeemed:
(1) By the judgment debtor;
(2) With property other than partnership property, by one (1) or more of the other partners; or
(3) 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.
(d) This chapter does not deprive a partner of a right under exemption laws with respect to the partner's interest in the partnership.
(e) This section provides the exclusive remedy by which a judgment creditor of a partner or partner's transferee may satisfy a judgment out of the judgment debtor's transferable interest in the partnership.
T. C. § 61-3-703. Charging order
(a) On application by a judgment creditor of a partner or transferee, a court may enter a charging order against the transferable interest of the judgment debtor for the unsatisfied amount of the judgment. A charging order constitutes a lien on a judgment debtor's transferable interest and requires the limited partnership to pay over to the person to which the charging order was issued any distribution that otherwise would be paid to the judgment debtor.
(b) To the extent necessary to effectuate the collection of distributions pursuant to a charging order in effect under subsection (a), the court may:
(1) Appoint a receiver of the distributions subject to the charging order, with the power to make all inquiries the judgment debtor might have made; and
(2) Make all other orders necessary to give effect to the charging order.
(c) The partner or transferee whose transferable interest is subject to a charging order under subsection (a) may extinguish the charging order by satisfying the judgment and filing a certified copy of the satisfaction with the court that issued the charging order.
(d) This chapter does not deprive any partner or transferee of the benefit of any exemption law applicable to the transferable interest of the partner or transferee.
(e) This section provides the exclusive remedy by which a person, other than the partnership itself, seeking in the capacity of a judgment creditor to enforce a judgment against a partner or transferee may satisfy the judgment from the judgment debtor's transferable interest.
LIMITED LIABILITY COMPANIES
T. C. § 48-249-509. Rights of judgment creditor
On application to a court of competent jurisdiction by any judgment creditor of a member or holder of financial rights, the court may charge such person's financial rights with payment of the unsatisfied amount of the judgment with interest. To the extent so charged, the judgment creditor has only the rights of a transferee of such person's financial rights under § 48-249-507. This section does not deprive any member, holder or transferee of financial rights of the benefit of any exemption laws applicable to the membership interest or financial rights. This section is the sole and exclusive remedy of a judgment creditor with respect to the judgment debtor's membership interest or financial rights.
Tennessee Charging Order Opinions
- Arvest Bank v. Byrd, Case No.10-02004 (W.D.Tenn., Aug, 19, 2014).
- Estate of Bentley v. Byrd, 2018 WL 930921 (Tenn.App., Feb. 15, 2018).
- In re Denman, 513 B.R. 720 (W.D.Tenn., July 24, 2014).
- Peach REO, LLC v. Rice, 2017 WL 2963511 (W.D.Tenn., July 11, 2017).
- Rogers Group, Inc. v. Gilbert, 2016 WL 2605651 (Tenn.App., May 3, 2016).