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What Is A Charging Order And Why Should A Business Lawyer Care?, Daniel S. Kleinberger
What Is A Charging Order And Why Should A Business Lawyer Care?, Daniel S. Kleinberger
Faculty Scholarship
Suppose your client has a judgment from a court in state X against a shareholder of a closely held corporation organized under the law of state X. You know that your client can levy on the judgment debtor’s shares to enforce the judgment and either obtain the shares (and attendant voting and economic rights) or trigger a pre-existing buy-out agreement with the shareholders or the corporation, which will replace the judgment debtor’s shares with right to payment. The relevant civil procedures may be complicated (or even arcane), but in theory your client’s remedy is straightforward.
Now suppose that the judgment …
Limited Liability Limited, Daniel S. Kleinberger
Limited Liability Limited, Daniel S. Kleinberger
Faculty Scholarship
Limited liability companies went mainstream in 1988, began to capture the market for closely held businesses in 1997, and now have the lion’s share of that market. Since the advent of limited liability companies, a corporate-like liability shield, in addition to pass-through status under federal income tax law, has been one of two hallmarks of a limited liability company. Indeed, for many years courts have described the limited liability company as “a hybrid business entity [that] provides members with limited liability to the same extent enjoyed by corporate shareholders.”
The LLC shield should therefore be easy to understand: a limited …