South Dakota Codified Laws 47-34A-504. Rights of creditor
(a) On application by a judgment creditor of a member of a limited liability company or of a member’s transferee, and following notice to the limited liability company of such application, a court having jurisdiction may charge the distributional interest of the judgment debtor to satisfy the judgment.
(b) A charging order constitutes a lien on the judgment debtor’s distributional interest.
Terms Used In South Dakota Codified Laws 47-34A-504
- Distributional interest: means all of a member's interest in distributions by the limited liability company. See South Dakota Codified Laws 47-34A-101
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
- 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
- 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.
- Member: means a person that:
(A) Prior to formation of the limited liability company, becomes a member as agreed by that person and the organizer of the limited liability company. See South Dakota Codified Laws 47-34A-101
- Property: includes property, real and personal. See South Dakota Codified Laws 2-14-2
(c) A distributional interest in a limited liability company which is charged may be redeemed:
(1) By the judgment debtor;
(2) With property other than the company’s property, by one or more of the other members; or
(3) With the company’s property, but only if permitted by the operating agreement.
(d) This chapter does not affect a member’s right under exemption laws with respect to the member’s distributional interest in a limited liability company.
(e) This section provides the exclusive remedy that a judgment creditor of a member’s distributional interest or a member’s assignee may use to satisfy a judgment out of the judgment debtor’s interest in a limited liability company. No other remedy, including foreclosure on the member’s distributional interest or a court order for directions, accounts, and inquiries that the debtor, member might have made, is available to the judgment creditor attempting to satisfy the judgment out of the judgment debtor’s interest in the limited liability company.
(f) No creditor of a member or a member’s assignee has any right to obtain possession of, or otherwise exercise legal or equitable remedies with respect to, the property of the company.
(g) This section applies to single member limited liability companies in addition to limited liability companies with more than one member.
Source: SL 1998, ch 272, § 504; SL 2007, ch 262, § 1; SL 2009, ch 234, § 2; SL 2012, ch 226, § 1; SL 2013, ch 233, § 13.