On May 31, 2011, Florida Governor Rick Scott signed into law H.B. 253, which amended Florida Statutes § 608.433 to explicitly provide that a charging order is the “sole and exclusive remedy” against limited liability company (“LLC”) membership interests. The law, however, further provides that a charging order is not the sole and exclusive remedy in the context of a single-member LLC if the judgment creditor establishes to the satisfaction of a court that distributions under a charging order will not satisfy the judgment within a reasonable time. In such case, a court may order a foreclosure sale of a debtor’s single-member LLC interest.
This legislation was adopted to clarify the decision in Shaun Olmstead, et. al. v. Federal Trade Commission, 44 So. 3d 76 (Fla. 2010), in which the Court held that charging orders are not the exclusive remedy to enforce a judgment against the sole member of a single-member Florida LLC. The law clarifies that the decision in Olmstead does not apply in the context of a multimember Florida LLC.