1. On application by a judgment creditor of a member or transferee, a court may enter a charging order against the transferable interest of the judgment debtor for the unsatisfied amount of the judgment. Except as otherwise provided in subsection 6, a charging order constitutes a lienon a judgment debtor’s transferable interest and requiresthe limitedliability company to pay over to the person to which the charging order was issued any distribution that otherwise would be paid to the judgment debtor. 2. To the extent necessary to effectuate the collection of distributions pursuant to a charging order in effect under subsection 1, the court may do allof the following: a. Appoint a receiver of the distributions subject to the charging order, with the power to make allinquiries the judgment debtor might have made. b. Make all other orders necessary to give effect to the charging order. 3. Upon a showing that distributions under a charging order will not pay the judgment debt within a reasonable time, the court may foreclose the lien and order the sale of the transferable interest. Except as otherwise provided in subsection 6, the purchaser at the foreclosure sale obtains only the transferable interest, does not thereby become a member, and issubject to section 489.502. 4. At any time before foreclosure under subsection 3, the member or transferee whose transferable interest issubject to a charging order under subsection 1 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. 5. At any time before foreclosure under subsection 3, a limited liability company or one or more members whose transferable interests are not subject tothe charging order may pay tothe judgment creditor the full amount due under the judgment and thereby succeed to the rights of the judgment creditor, including the charging order. 6. Ifa court orders foreclosure of a charging order lien against the sole member of a limited liability company allof the following apply: a. The court shall confirm the sale. b. The purchaser at the sale obtains the member’s entire interest, not only the member’s transferable interest. c. The purchaser thereby becomes a member. d. The person whose interest was subject to the foreclosed charging order is dissociated as a member. 7. This chapter does not deprive anymember or transferee of the benefitof any exemption law applicable to the transferable interest of the member or transferee. 8. This section provides the exclusive remedy by which a person seeking in the capacity of judgment creditor to enforce a judgment against a member or transferee may satisfy the judgment from the judgment debtor’s transferable interest.
‹ Prev All Iowa sections Next ›
Lexace provides legal information, not legal advice, and no attorney–client relationship is created. Statute text is provided for general information and may not reflect the most recent amendments; verify against the official state code.