SB319

Senate Bill 319 amends the Uniform Limited Liability Company Act in Arkansas regarding the use of charging orders as a legal remedy for judgment creditors. The bill clarifies that a charging order serves as a lien on a judgment debtor's membership interest, entitling the creditor to distributions that would otherwise be paid to the debtor. It explicitly establishes the charging order as the exclusive remedy for a judgment creditor to satisfy a judgment from a member's interest in a limited liability company (LLC), prohibiting other legal remedies like foreclosure on the interest in most scenarios. The bill includes specific provisions stating that for multi-member LLCs, foreclosure is generally not available, and clarifies how these rules apply to single-member versus multiple-member entities. Furthermore, the bill specifies that these provisions do not override other security interests or assignments established via written agreements that comply with the company's operating documents. It also preserves existing legal exemptions applicable to a member's interest.