Florida’s Governor is expected to sign a bill that was passed by the Florida Senate on April 29th, 2011 which will apparently retroactively make a charging order the sole and exclusive remedy by which a judgment creditor of a member or a member’s assignee may satisfy a judgment from a the interest in an LLC and that foreclosure is not an available remedy in a multi member LLC.
Single member LLC do not have asset protection and a creditor of the member can apply top foreclosure on the membership interest of the owner of the LLC when it is shown that distributions will not satisfy the judgment within a reasonable amount of time.
Here is the house bill text on the subject which was passed on May 2nd 2011
CS/HB 253 – Limited Liability Companies GENERAL BILL by Civil Justice Subcommittee and Stargel and McBurney (CO-SPONSORS) Passidomo; Schwartz; Steube
Limited Liability Companies: Provides that charging order against member’s limited liability interest is sole & exclusive remedy available to enforce judgment creditor’s unsatisfied judgment against member or member’s assignee with respect to limited liability company; provides exception for enforcing judgment creditor’s unsatisfied judgment against judgment debtor or assignee of judgment debtor of single-member limited liability company under certain circumstances; provides that, in case of multimember limited liability company, certain remedies are unavailable to judgment creditor attempting to satisfy judgment; prohibits court from ordering such remedies; provides construction relating to secured creditor rights, specified principles of law and equity, and continuing enforcement jurisdiction of court; provides legislative intent; provides for retroactive application.