BILL NUMBER: AB 2355	CHAPTERED  09/10/02

	CHAPTER  451
	FILED WITH SECRETARY OF STATE  SEPTEMBER 10, 2002
	APPROVED BY GOVERNOR  SEPTEMBER 10, 2002
	PASSED THE ASSEMBLY  AUGUST 22, 2002
	PASSED THE SENATE  AUGUST 19, 2002
	AMENDED IN SENATE  AUGUST 13, 2002
	AMENDED IN SENATE  MAY 15, 2002
	AMENDED IN ASSEMBLY  APRIL 22, 2002

INTRODUCED BY   Assembly Member Bill Campbell

                        FEBRUARY 21, 2002

   An act to amend Sections 708.310 and 708.320 of the Code of Civil
Procedure, and to amend Section 17302 of the Corporations Code,
relating to limited liability companies.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2355, Bill Campbell.  Limited liability companies.
   Limited liability companies are regulated pursuant to the
Beverly-Killea Limited Liability Company Act.  Existing law
authorizes a court of competent jurisdiction, upon application by a
judgment creditor of a member of a limited liability company, to
charge the membership interest of the member with payment of an
unsatisfied judgment.  Existing law provides that, to the extent
charged, the judgment debtor has only the rights of an assignee of
the membership interest.
   This bill would extend these provisions to an application by a
judgment creditor against an assignee of the membership interest, and
would provide that service of a notice of motion for a charging
order on a judgment debtor and on all members or the limited
liability company creates a lien on the judgment debtor's assignable
membership interest in the limited liability company.  The bill would
provide that the lien continue under the terms of the charging
order, if granted, and would authorize the court to order a
foreclosure on the membership interest at any time, subject to the
charging order.  The bill would delete the provision that, to the
extent charged, a judgment creditor has only the rights of an
assignee of the membership interest.  The bill would provide that the
purchaser at the foreclosure sale has the rights of an assignee.
   This bill would also provide that, at any time before foreclosure,
a membership interest charged may be redeemed by the judgment
debtor, by other members with property other than property of the
limited liability company, or by other members with property of the
limited liability company with the consent of the members whose
membership interests are not so charged.
   This bill would authorize a court that has issued a charging order
to appoint a receiver of the share of the distributions of the
limited liability company and to make other orders, directions,
accounts, and inquiries that the judgment debtor might have made or
that the circumstances may require.
   This bill would also make conforming changes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 708.310 of the Code of Civil Procedure is
amended to read:
   708.310.  If a money judgment is rendered against a partner or
member but not against the partnership or limited liability company,
the judgment debtor's interest in the partnership or limited
liability company may be applied toward the satisfaction of the
judgment by an order charging the judgment debtor's interest pursuant
to Section 15673, 16504, or 17302 of the Corporations Code.
  SEC. 2.  Section 708.320 of the Code of Civil Procedure is amended
to read:
   708.320.  (a) A lien on a judgment debtor's interest in a
partnership or limited liability company is created by service of a
notice of motion for a charging order on the judgment debtor and on
either of the following:
   (1) All partners or the partnership.
   (2) All members or the limited liability company.
   (b) If a charging order is issued, the lien created pursuant to
subdivision (a) continues under the terms of the order.  If issuance
of the charging order is denied, the lien is extinguished.
  SEC. 3.  Section 17302 of the Corporations Code is amended to read:

   17302.  (a) On application by a judgment creditor of a member or
of a member's assignee, a court having jurisdiction may charge the
assignable membership interest of the judgment debtor to satisfy the
judgment.  The court may appoint a receiver of the share of the
distributions due or to become due to the judgment debtor in respect
to the limited liability company and may make all other orders,
directions, accounts, and inquiries that the judgment debtor might
have made or that the circumstances of the case may require.
   (b) A charging order constitutes a lien on the judgment debtor's
assignable membership interest.  The court may order a foreclosure on
the membership interest subject to the charging order at any time.
The purchaser at the foreclosure sale has the rights of an assignee.

   (c) At any time before foreclosure,  a membership interest charged
may be redeemed in any of the following manners:
   (1) By the judgment debtor.
   (2) With property other than property of the limited liability
company by one or more of the other members.
   (3) With property of the limited liability company by one or more
of the other members with the consent of all of the members whose
membership interests are not so charged.
   (d) This section does not deprive any member or assignee of a
membership interest of the benefit of any exemption laws applicable
to the membership interest in the limited liability company.
   (e) This section provides the exclusive remedy by which a judgment
creditor of a member or of a member's assignee may satisfy a
judgment out of the judgment debtor's membership interest in the
limited liability company.