Law v. Zemp

Summarized by:

  • Court: Oregon Supreme Court
  • Area(s) of Law: Business Law
  • Date Filed: 01-11-2018
  • Case #: S064387
  • Judge(s)/Court Below: Walters, J. for the Court; Balmer, J.; Flynn, J.; Kistler, J.; Nakamoto, J.; Landau, J.; & Ortega, J. pro tempore.
  • Full Text Opinion

“[A] trial court has general or specific statutory authority to include, in a charging order, ancillary provisions that it finds necessary to allow a judgment creditor access to a debtor-partner’s distributional interest in a company, as long as those provisions do not unduly interfere with the company’s management.”

Both parties challenged a decision from the Court of Appeals (Law v. Zemp, 276 Or App 652, 368 P3d 821, adh’d to on recons, 279 Or App 808, 381 P3d 1099 (2016)). The Court of Appeals held that some ancillary provisions of a charging order in a judgment against Defendant’s limited partnerships (LPs) were authorized under ORS 70.295, but not the ancillary provisions against the limited liability companies (LLCs) under ORS 63.259. Defendant challenged only the determination that ORS 70.295 permits ancillary provisions against the LPs, arguing that ORS 70.295 does not grant any authority under any circumstance because there is no expressed authorization whereas expressed authorization appears elsewhere in related statutes. The Oregon Supreme Court held that “a trial court has general or specific statutory authority to include, in a charging order, ancillary provisions that it finds necessary to allow a judgment creditor access to a debtor-partner’s distributional interest in a company, as long as those provisions do not unduly interfere with the company’s management.” The Court determined the record does meet the newly established standard, and thus found the trial court erred. The decision of the Court of Appeals is reversed. The order of the circuit court is reversed, and the case is remanded to the circuit court for further proceedings.

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