Kentucky Statutes 362.481 – Rights of judgment creditor
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(1) This section provides the exclusive remedy by which the judgment creditor of a partner or the transferee of a partner may satisfy a judgment out of the judgment debtor’s transferable interest.
(2) On application to a court of competent jurisdiction by any judgment creditor of a partner or a partner’s transferee, the court may charge the transferable interest of the judgment debtor with payment of the unsatisfied amount of the judgment. To the extent so charged, the judgment creditor has only the rights of a transferee, and shall have no right to participate in the management of or to cause the dissolution of the partnership. The court may appoint a receiver of the share of the distributions due or to become due to the judgment debtor in respect of the partnership and make all other orders, directions, accounts, and inquiries the judgment debtor might have made or which the circumstances of the case may require to give effect to the charging order.
(3) A charging order constitutes a lien on and the right to receive distributions made with respect to the judgment debtor’s transferable interest. A charging order does not of itself constitute an assignment of the transferable interest.
(4) The court may order a foreclosure upon the transferable interest subject to the charging order at any time. The purchaser at the foreclosure sale has the rights of a transferee.
(5) At any time before foreclosure, an interest charged may be redeemed: (a) By the judgment debtor;
(b) With property other than limited partnership property, by one (1) or more of the other partners; or
(c) With limited partnership property, by the limited partnership with the consent of all partners whose interests are not so charged.
(6) This section does not deprive any partner or a partner’s transferee of the benefit of any exemption laws applicable to the partner’s or transferee’s transferable interest.
(7) The partnership is not a necessary party to an application for a charging order.
Service of the charging order on a partnership may be made by the court granting the charging order or as the court may otherwise direct.
(8) This section shall not apply to the enforcement of a judgment by a limited partnership against a partner of that partnership.
(9) This section shall apply to the issuance of a charging order against the interest of a partner or assignee of a partner of a foreign partnership.
Effective:June 29, 2017
History: Amended 2017 Ky. Acts ch. 193, sec. 17, effective June 29, 2017. — Repealed, reenacted, and amended 2010 Ky. Acts ch. 133, sec. 50, effective July 15, 2010. — Repeal the prior repeal contained in 2006 Ky. Acts ch. 149, sec. 239, which was to have been effective January 1, 2008, 2007 Ky. Acts ch.
137, sec. 180, effective June 26, 2007. — Repealed 2006 Ky. Acts ch. 149, sec.
239, effective January 1, 2008. — Amended 1998 Ky. Acts ch. 341, sec. 53, effective July 15, 1998. — Created 1988 Ky. Acts ch. 284, sec. 41, effective July
15, 1988.
(2) On application to a court of competent jurisdiction by any judgment creditor of a partner or a partner’s transferee, the court may charge the transferable interest of the judgment debtor with payment of the unsatisfied amount of the judgment. To the extent so charged, the judgment creditor has only the rights of a transferee, and shall have no right to participate in the management of or to cause the dissolution of the partnership. The court may appoint a receiver of the share of the distributions due or to become due to the judgment debtor in respect of the partnership and make all other orders, directions, accounts, and inquiries the judgment debtor might have made or which the circumstances of the case may require to give effect to the charging order.
Terms Used In Kentucky Statutes 362.481
- Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
- Foreign: when applied to a corporation, partnership, limited partnership, business trust, statutory trust, or limited liability company, includes all those incorporated or formed by authority of any other state. See Kentucky Statutes 446.010
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Lien: A claim against real or personal property in satisfaction of a debt.
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Partnership: includes both general and limited partnerships. See Kentucky Statutes 446.010
(3) A charging order constitutes a lien on and the right to receive distributions made with respect to the judgment debtor’s transferable interest. A charging order does not of itself constitute an assignment of the transferable interest.
(4) The court may order a foreclosure upon the transferable interest subject to the charging order at any time. The purchaser at the foreclosure sale has the rights of a transferee.
(5) At any time before foreclosure, an interest charged may be redeemed: (a) By the judgment debtor;
(b) With property other than limited partnership property, by one (1) or more of the other partners; or
(c) With limited partnership property, by the limited partnership with the consent of all partners whose interests are not so charged.
(6) This section does not deprive any partner or a partner’s transferee of the benefit of any exemption laws applicable to the partner’s or transferee’s transferable interest.
(7) The partnership is not a necessary party to an application for a charging order.
Service of the charging order on a partnership may be made by the court granting the charging order or as the court may otherwise direct.
(8) This section shall not apply to the enforcement of a judgment by a limited partnership against a partner of that partnership.
(9) This section shall apply to the issuance of a charging order against the interest of a partner or assignee of a partner of a foreign partnership.
Effective:June 29, 2017
History: Amended 2017 Ky. Acts ch. 193, sec. 17, effective June 29, 2017. — Repealed, reenacted, and amended 2010 Ky. Acts ch. 133, sec. 50, effective July 15, 2010. — Repeal the prior repeal contained in 2006 Ky. Acts ch. 149, sec. 239, which was to have been effective January 1, 2008, 2007 Ky. Acts ch.
137, sec. 180, effective June 26, 2007. — Repealed 2006 Ky. Acts ch. 149, sec.
239, effective January 1, 2008. — Amended 1998 Ky. Acts ch. 341, sec. 53, effective July 15, 1998. — Created 1988 Ky. Acts ch. 284, sec. 41, effective July
15, 1988.