Nevada Law Says Charging Lien Is Exclusive Remedy Against Stock In Multi-Shareholder Nevada Corporation
Nevada passed a law this year applying the charging lien remedy to stock in a multi-shareholder Nevada corporation. Charging liens are the creditor’s remedy to attack a debtor’s interests in limited partnerships and LLCs in most states In Florida, the charging lien is a creditor’s exclusive remedy against limited partnership interests and an optional, but non-exclusive, remedy against debtor’s Florida LLC interests. Prior to the Nevada law, no state had said that judgment creditors are restricted to a charging lien , instead of levy and sale, of a debtor’s stock in a corporation.
Does the Nevada statute provide an asset protection tool for Florida debtors? There are no cases on this brand new statute, but I think the likely answer is that a Florida creditor may levy upon a Florida debtor’s stock in a Nevada corporation notwithstanding the Nevada statute stating that creditors a limited to charging liens. A levy is an action against the debtor’s stock certificate and not against the corporation. A creditor does not have to make the corporation a party in a levy proceeding, and therefore, the forum of the corporation is not controlling on the Florida remedy. I think a Florida judge will be able to permit creditors to levy upon Nevada corporate stock.
Last updated on May 22, 2020

About the Author
Jon Alper is an expert in asset protection planning for individuals and small businesses.

About the Author
Jon Alper is an expert in asset protection planning for individuals and small businesses.