HB1020

House Bill 1020 amends the Uniform Limited Liability Company Act regarding charging orders, which are legal mechanisms that allow a judgment creditor to collect on a debt from a debtor's financial interest in an LLC. The bill clarifies the court's authority to appoint a receiver or foreclose on a transferable interest to satisfy a judgment. It provides specific rules for cases involving sole-member LLCs, allowing for the transfer of full membership status to a purchaser in foreclosure proceedings. Furthermore, the legislation addresses scenarios where members may engage in bad faith or intentional misconduct to defeat a charging order. The bill also establishes that charging orders represent the exclusive remedy for judgment creditors seeking to satisfy debts from a member's interest in a multi-member LLC. Additionally, it preserves existing exemption laws and protects the validity of prior security agreements or assignments made by members.