A Tale of Two Charging Orders

Many practitioners think limiting creditors of an LLC member to a “charging order” is a panacea. Other practitioners think the benefits of charging orders are overblown. Who is correct? Can a member’s judgment creditor access LLC property? In addition to a recent case from the Alabama Supreme Court[1], two other recent cases illustrate how charging…
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Charging Orders – SE Property Holdings, LLC

What are the rights of a creditor to LLC interests to satisfy their claim? That question was at issue in a recent opinion from the Alabama Supreme Court.[1] In that case, the creditor received a “charging order” (discussed below) requiring that distributions from the LLC made to the debtor be instead transferred to the clerk…
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LLC v. S Corp.: Is That Really the Question?

We regularly see continuing education materials, blog posts, publications, and other materials titled “LLC v. S Corp. – Which is Right for Your Business?” or something similar. Regardless of the exact title, these items purport to ask the question of whether an LLC or S Corp. is the better choice of entity. But is that…
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IRS Issues Carried Interest Final Regulations

On January 7, 2021, the IRS issued final regulations under § 1061 of the Internal Revenue Code (“Code”)[1]. These final regulations largely adopt the proposed regulations issued in July 2020[2] but contain a number of taxpayer favorable changes. As discussed below, the rules under § 1061 can apply in a number of situations such as…
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