Opinion 2021 Kansas Oberg Charging Order Jurisdiction




The Creditor's Remedy Against A Debtor's Interest In An LLC Or Partnership


2021 - Florida - O'Neal - Jurisdiction


O'Neal v. CDB American Franchise System, Inc., 2021 WL 3709716 (M.D.Fla., Aug. 20, 2021).


United States District Court, M.D. Florida, Tampa Division.


Thomas O’NEAL, Plaintiff,




CDB AMERICAN FRANCHISE SYSTEM, INC.; CDB American Shaman, LLC; Shaman Botanicals, Inc.; Florida Shaman Properties, LLC; Brandon Carnes; and Katelyn Sigman, Defendants.


Case No. 8:20-cv-936-KKM-AAS


Signed 08/20/2021


Attorneys and Law Firms


Wolfgang M. Florin, Scott L. Terry, Florin Gray Bouzas Owens, LLC, Lutz, FL, for Plaintiff.




AMANDA ARNOLD SANSONE, United States Magistrate Judge


*1 Plaintiff Thomas O’Neal moves for the entry of a charging lien on Defendant Brandon Carnes’s membership interest in these nine Missouri limited liability companies: (1) F&B, LLC; (2) BC Convenience, LLC; (3) Dynamic Distribution, LLC; (4) Missouri A.S. Properties, LLC; (5) AS Mission Wellness, LLC; (6) Arizona AS Properties, LLC; (7) Colorado Shaman Properties, LLC; (8) Eighty8 Investments, LLC; and (9) Vast Distribution, LLC (collectively, the Missouri LLCs). (Doc. 82, p.1).


Mr. O’Neal obtained judgment against Mr. Carnes and others for $608,400.00. (Doc. 78). Under Federal Rule of Civil Procedure 69(a), the procedure for executing judgment “must accord with the procedure of the state where the court is located.” Fed. R. Civ. P. 69(a)(1). Thus, Florida procedure for executing judgments applies here.


Florida Statute 605.0503(1) provides:


On application to a court of competent jurisdiction by a judgment creditor of a member or a transferee, the court may enter a charging order against the transferable interest of the member or transferee for payment of the unsatisfied amount of the judgment with interest. Except as provided in subsection (5), a charging order constitutes a lien upon a judgment debtor’s transferable interest and requires the limited liability company to pay over to the judgment creditor a distribution that would otherwise be paid to the judgment debtor.


This court must therefore determine whether it has competent jurisdiction to issue a charging order against Mr. Carnes’s membership interests in the Missouri LLCs.


Florida Statute § 605.0501 states that transferable interests in limited liability companies, like membership interests, are personal property. Florida courts have established that membership and other transferable interests in limited liability companies are intangible personal property that “accompan[y] the person of the owner.” Wells Fargo Bank, N.A. v. Barber, 85 F. Supp. 3d 1308, 1315–16 (M.D. Fla. 2015) (citing Beverly Beach Props. v. Nelson, 68 So.2d 604, 611 (Fla. 1953)). As such, membership interests in foreign LLCs (like the Missouri LLCs here) may be subject to a charging order issued by a Florida court if the other jurisdictional requirements are satisfied.


“Florida courts do not have in rem or quasi in rem jurisdiction over foreign property.” Sargeant v. Al–Saleh, 137 So.3d 432, 434 (Fla. Dist. Ct. App. 2014) (citations omitted). The cases favorably cited by Mr. O’Neal in his motion confirm this requirement. See Wells Fargo Bank, N.A. v. Barber, 85 F. Supp. 3d 1308, 1315 (M.D. Fla. 2015) (“Therefore, because Barber resides in Florida, Barber’s membership interest in Blaker is located with her in Florida and is properly subject to in rem jurisdiction in this state”); In re McCuan, 2018 WL 11206025, *5 (Bankr. M.D. Fla. Feb. 13, 2018) (“Here, there is no dispute that this Court has personal jurisdiction over Jill McCuan because her primary residence is in Florida”).


Mr. O’Neal failed to establish Mr. Carnes’s membership interests in the Missouri LLCs are sufficiently domestic to Florida to establish in rem or quasi in rem jurisdiction. Instead, Mr. Carnes is a Kansas resident with membership interests in limited liability companies solely domestic to Missouri. (See Doc. 6, Doc. 82–1). As such, this court cannot exercise jurisdiction over Mr. Carnes’s membership interests in the Missouri LLCs.


*2 Accordingly, Mr. O’Neal’s motion for a charging lien on Mr. Carnes’s limited liability company interests in the Missouri LLCs is DENIED.


ORDERED in Tampa, Florida on August 20, 2021.



by Jay Adkisson


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More Articles On Charging Orders click here



by Jay Adkisson


For more on the historical background of Charging Orders and contemporary issues involving the same, see Jay Adkisson's article, Charging Orders: The Peculiar Mechanism, 61 South Dakota Law Review 440 (2016). Available at SSRN: https://ssrn.com/abstract=2928487



General Information


Analysis of Uniform Limited Liability Company Act Sections re Charging Orders

  • Charging Orders (Section 503) contains the general charging order provisions.
  • Transfers of Transferable Interests (Section 502) includes definitions of "transfer" (102(23)), "transferable interests" (102(24)), and "transferees" (102(25)) defines to what the charging order attaches.
  • Definition of Distribution (Section 102(4)) specifies the economic right obtained through a charging order lien and/or foreclosure.


The Uniform Acts re Charging Orders and Transferable Interests (without Jay's comments):


Effect of Bankruptcy On The Debtor-Member's LLC Interest here



Collected Court Opinions On Charging Orders here and below


Charging Order Example Sample Form





     Distributions/Economic Rights - Creditors rights to distributional interests/economic rights


     Prejudgment Relief - Freezing the interest and distributions pending judgment


     Entities - The types of legal entities amenable to charging orders, or not

     Procedure - The procedure for obtaining a charging order and ancillary provisions

     Unknown Interest - Where the debtor's interest, if any, has not been ascertained

     Order Form Generally - Most issues to the form of the charging order

     Order Form Future Interests - How the charging order affects subsequently-acquired interests

     Exemptions - Available state and federal protections that may apply to charging orders


     Abstention - Collateral attacks on charging orders in federal court

     Conflicts-Of-Law - Determining which state's laws apply to a charging order dispute

     Jurisdiction - Issues relating to the court's authority over out-of-state debtors and LLCs

     Foreign Entities - Charging orders against out-of-state entities


     Creditor Rights Restrictions - Limitations on creditors' management and informational rights

     Information Rights - Creditors' ability to access information about the LLC

     Management & Voting Rights - Rights of creditor after charging order issued


     Lien - The lien effect of a charging order and priority issues


     Compliance - Issues for the LLC and non-debtor members in complying with a charging order

     Receiver - The role of the receiver in charging order proceedings


     Single-Member LLCs - Enforcing the judgment against an LLC with a sole member


     Foreclosure - Liquidation by judicial sale of the debtor's right to distributions


     Repurchase/Redemption Rights - Third-parties' ability to purchase the charged interest


     Appeal - Issues relating to the appeal of a charging order


     Exclusivity - The charging order as the sole remedy available to creditors and exceptions

     Voidable Transactions/Fraudulent Transfers - Issues relating to avoidable transfers of interests


     Abstention - Attempts to collaterally attack the charging order in federal court

     Bankruptcy - Treatment of the debtor/member's interest in bankruptcy

     Intra-Member Disputes - Where one member obtains a charging order against another

     Taxes - Tax issues relating to charging orders for all involved parties


= = = = =


List Of Court Opinion Sections

Additional Court Opinions About charging orders (unsorted)




The Charging Order Practice Guide: Understanding Judgment Creditor Rights Against LLC Members, by Jay D. Adkisson (2018), published by the LLCs, Partnerships and Unincorporated Entities Committee of the Business Law Section of the American Bar Association, click here for more


Available for purchase directly from the ABA at https://goo.gl/faZzY6


Also available from Amazon at https://www.amazon.com/Charging-Orders-Practice-Guide-Understanding/dp/1641052643


by Jay Adkisson


  • Jay Adkisson - More about Jay D. Adkisson, background, books, articles, speaking appearances.


  • Creditor-Debtor Law - An overview of judgment enforcement tools and their uses by creditors, and possible defenses by debtors. Related topics include:


  • Voidable Transactions - Discussion of the Uniform Voidable Transactions Act (a/k/a 2014 Revision of the Uniform Fraudulent Transfers Act) and fraudulent transfer law in general.


  • California Enforcement of Judgments Law - Considers the topic of judgment enforcement in California, including the California Enforcement of Judgments Law and other laws related to California creditor-debtor issues.


  • Private Retirement Plans - An exploration of a unique creditor exemption allowed under California law which can be very beneficial but is often misused.


  • Protected Series - An examination of the single most complex statutory legal structure yet created, with particular reference to the Uniform Protected Series Act of 2017.


  • Asset Protection - The all-time best-selling book on asset protection planning by Jay Adkisson and Chris Riser.



  • Captive Insurance - Licensed insurance companies formed by the parent organization to handle the insurance and risk management needs of the business.


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© 2021 Jay D. Adkisson. All Rights Reserved. No claim to government works or the works of the Uniform Law Commission. The information contained in this website is for general educational purposes only, does not constitute any legal advice or opinion, and should not be relied upon in relation to particular cases. Use this information at your own peril; it is no substitute for the legal advice or opinion of an attorney licensed to practice law in the appropriate jurisdiction. This site is https://chargingorder.com Contact: jay [at] jayad.com or by phone to 702-953-9617 or by fax to 877-698-0678.