Jurisdiction And Service Of Charging Order
Topic Jurisdiction TopicsJurisdictionService
The courts have frequently struggled the issue of whether there must be personal jurisdiction over the entity for the charging order to be issued. In my opinion, the correct rule would be that that the court does not need jurisdiction in personam to place the lien on the D/M's entity (any more than a creditor would need jurisdiction over Intel to place a lien on the debtor's Intel stock shares), but that personal jurisdiction would be required to enforce the charging order against the entity, i.e., if the court of judgment does not have personal jurisdiction over the entity, then to enforce the charging order against the entity as to distributions the creditor would need to domesticate the judgment in the jurisdiction where the entity is found. However, even as to distributions, the court of judgment would be able to enforce the charging order against the D/M, i.e., compel the D/M to pay over distributions to the creditor, since personal jurisdiction over the D/M has already been established.
At the very least, this issue needs to be fully addressed in the Comment to § 503, but because jurisdiction is a critically important threshold issue, perhaps it would warrant a statutory change.
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JURISDICTION AND SERVICE OF CHARGING ORDERS OPINIONS
- Arayos, LLC v. Jimmie Ellis, 2016 WL 1642676 (S.D.Ala., 2016).
- AVT - New York, L.P. v. Olivet University, 2022 WL 951754 (D.Utah., March 30, 2022).
- Bank of America, N.A. v. Freed, ___ N.E.2d ____, 2012 IL App (1st) 110749, 2012 WL 6725894 (Ill.App. 1 Dist., 2012).
- Estate of Bentley v. Byrd, 2018 WL 930921 (Tenn.App., Feb. 15, 2018).
- Farmer v. Farmer, 2022 WL 3270714 (S.D., Aug. 10, 2022).
- German American Capital Corp. v. Morehouse, 2017 WL 3411941 (D.Md., 2017).
- Koh v. Inno-Pacific Holdings, Ltd., 114 Wash.App. 268, 54 P.3d 1270 (2002).
- Merrill Ranch Properties, LLC v. Austell, 2016 WL 1176823 (Ga.App., 2016).
- O'Neal v. CDB American Franchise System, Inc., 2021 WL 3709716 (M.D.Fla., Aug. 20, 2021).
- Oberg v. Lowe, 2021 WL 495043 (D.Kan., Jan. 4, 2021).
- Rockstone Capital, LLC v. Marketing Horizons, Ltd., 2013 WL 4046597 (Conn.Super., Unpublished, July 17, 2013).
- Shanghai Real Estate Ltd. v. Greenberg, 2014 WL 660624 (Conn.Super., Jan. 28, 2014).
- Spates v. Office of the Attorney General, 2016 WL 354417 (Tex.App.14th Dist., Jan. 28, 2016).
- Steamfitters Union v. Direct Air, LLC, 2020 WL 6131163 (E.D.Pa., 2020).
- Vision Marketing Resources, Inc. v. McMillin Group, LLC, 2015 WL 4390071 (D.Kan., July 15, 2015).
- Wells Fargo Bank v. Barber, 2015 WL 470589 (M.D.Fla., Feb. 4, 2015).
- Williams v. The Estates LLC, 2022 WL 3226659 (M.D.N.C., Aug. 10, 2022).
- Wright v. Shenandoah Investors, LLC, 2023 NY Slip Op. 31392(U)