Charging Orders -- A Reconsideration

A review of charging order law and developments and recommendations for change. Society expects accountability in many areas. Creditors expect that people who owe them money will be accountable for their debts. A person who is injured by another person’s negligence or misconduct expects the other person to be accountable. Persons who seek professional advice — whether medical, legal, accounting, or other — expect to receive competent advice tailored to their particular problem and that the professional advisor will stand behind his or her advice. Often, if not in most cases, the owners, customers, and suppliers of businesses expect the people who are managing the business to be accountable for managing the business well. Despite these understandable expectations, changes in the law in the last several years with respect to a creditor’s ability to reach a debtor’s interest in a partnership or limited liability company have made accountability ephemeral or non-existent in many cases.