However, neither the uniform acts nor any of the state charging order statutes make any distinction between single-member and multi-member LLCs.
Some courts have held that the charging order protection would apply in a case where all of the partners of a limited partnership were the debtors of a single creditor.
D. Colo. 2003), one bankruptcy court held that the charging order protection does not apply to single-member LLCs.
In that eventually the charging order limitation becomes a moot point, because the entity is no longer considered to have a separate legal identity from its owners.
In a state requiring a business purpose, a partnership or an LLC holding personal property may be subject to a reverse piercing claim.
If necessary, a stop order on the fund and the dividends payable by the debtor can be obtained by the creditor to protect his interest.
)[1] As to court procedure in England & Wales see CPR73 [1] and PD73 [2] The reality of charging orders is that creditors can secure debts that they lent unsecured.
On Saturday 22 March 2008 the Times reported[4] "The Courts Service received a total of 92,933 applications in 2006, compared with only 16,014 in 2000.