O.C.G.A.

14-9A-52 (2019)

Rights of judgment creditor of limited partner

✓ O.C.G.A. — 2019 edition (Public.Resource.Org Release 73)

Code text and O.C.G.A. statutory annotations on this page reflect the 2019 Official Code of Georgia Annotated (Public.Resource.Org Release 73, 2019-08-21; public domain per Georgia v. Public.Resource.Org, 2020). The Syfert case-law annotations in Notes of Decisions, below, are current.

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(a) On due application to a court of competent jurisdiction by any judgment creditor of a limited partner, the court may charge the interest of the indebted limited partner with payment of the unsatisfied amount of the judgment debt and may appoint a receiver and make all other orders, directions, and inquiries which the circumstances of the case may require.

(b) The interest may be redeemed with the separate property of any general partner, but may not be redeemed with partnership property.

(c) The remedies conferred by subsection (a) of this Code section shall not be deemed exclusive of others which may exist.

(d) Nothing in this article shall be held to deprive a limited partner of his statutory exemption.

History

(Ga. L. 1952, p. 375, § 22; Code 1981, § 14-9-52; Code 1981, § 14-9A-52, as redesignated by Ga. L. 1988, p. 1016, § 1.)

Annotations

JUDICIAL DECISIONS Effect of charging order. - The charging order remedy entitles the creditor to receive the profits and surplus of the limited partnership, which the limited partner would otherwise have been entitled to receive, up to the unsatisfied

amount of the judgment debt, but gives no direct remedy against specific limited partnership property. Nigri v. Lotz, 216 Ga. App. 204, 453 S.E.2d 780 (1995). A charging order under O.C.G.A. § 14-9A-52 is not an assignment of the

CORPORATIONS & PARTNERSHIPS

limited partner’s interest to the creditor, nor does it confer upon the creditor the status of a substituted limited partner. Nigri v. Lotz, 216 Ga. App. 204, 453 S.E.2d 780 (1995). Foreclosure of charged interest. - As an aid to enforcement of a charging order, the trial court is authorized to order that a limited partner’s charged interest be foreclosed by judicial sale at which the partnership interest may be purchased by the judgment creditor or a third party. Nigri v. Lotz, 216 Ga. App. 204, 453 S.E.2d 780 (1995). A charging order is considered the primary method of satisfying the creditor’s judgment, but the further step of ordering a sale may be considered appropriate where it is apparent that distributions under the charging order will not pay the judgment debt within a reasonable period of time. Nigri v. Lotz, 216 Ga. App. 204, 453 S.E.2d 780 (1995). Transfer of a charged interest that the debtor partner would have had pursuant to a foreclosure sale did not place the purchaser in the position of a limited partner. Accordingly, if the creditor under the charging order is the purchaser, the creditor does not by virtue of the purchase become a substituted limited partner and is only entitled to receive the distributions to which the debtor limited partner would have been entitled. Nigri v. Lotz, 216 Ga. App. 204, 453 S.E.2d 780 (1995). The prohibition against sale of a charged interest by O.C.G.A. § 14-8-28 of the Uniform Partnership Act is inconsistent with the charging remedy provisions of O.C.G.A. § 14-9A-52 and does not apply

to prohibit foreclosure of the charged interest of a limited partner. Nigri v. Lotz, 216 Ga. App. 204, 453 S.E.2d 780 (1995). A judgment against a limited partner does not create a lien against the partnership interest. Harris v. C.C. Dickson, Inc. (In re Smith), 17 Bankr. 541 (Bankr. M.D. Ga. 1982). Financial payments to which a limited partner is entitled pursuant to statute or the partnership/certificate of formation is a chose in action and a judgment creditor must initiate collateral proceedings in order to attach a lien thereto. Prodigy Centers/Atlanta v. T-C Assocs., 269 Ga. 522, 501 S.E.2d 209 (1998). Broad judicial discretion. - Trial court has broad discretion as to whether or not to order a foreclosure and judicial sale of charged interests. Nigri v. Lotz, 216 Ga. App. 204, 453 S.E.2d 780 (1995). A limited partner’s interest in the partnership is a chose in action, which is not subject to seizure and sale under executions based upon ordinary judgments. Harris v. C.C. Dickson, Inc. (In re Smith), 17 Bankr. 541 (Bankr. M.D. Ga. 1982). Partner’s interest in a limited partnership was properly subjected to judicial sale to satisfy a judgment for the partnership where the judgment was final as between the parties and such a remedy was within the discretion of the trial court. Stewart v. Lanier Med. Office Bldg., 259 Ga. App. 898, 578 S.E.2d 572 (2003). Cited in Mahalo Invs. III, LLC v. First Citizens Bank & Trust Co., 330 Ga. App. 737, 769 S.E.2d 154 (2015); Gaslowitz v. Stabilis Fund I, LP, 331 Ga. App. 152, 770 S.E.2d 245 (2015).

RESEARCH REFERENCES Am. Jur. 2d. - 59A Am. Jur. 2d, Partnership, § 867 et seq. C.J.S. - 68 C.J.S., Partnership, §§ 591 et seq., 602 et seq. U.L.A. - Uniform Limited Partnership Act (U.L.A.) § 22. ALR. - Right to setoff claim of individual partner against claim against partnership, 55 ALR 566.

Right of partnership creditor to proceed against estate of deceased partner, 61 ALR 1410. Necessity and manner of pleading denial of partnership in action by third person against alleged partners, 68 ALR2d 545.

T.14, C.9A, A.1, P.4

PART 4 GENERAL PARTNERS

Notes of Decisions

Cited in 6 cases, 1995–2017 · leading case: Nigri v. Lotz, 453 S.E.2d 780 (Ga. Ct. App. 1995).

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Nigri v. Lotz, 453 S.E.2d 780 (Ga. Ct. App. 1995). · cites it 20× “13, filed a petition pursuant to OCGA § 14-9A-52 seeking to charge Lotz’s partnership interests in two limited partnerships with payment of the unsatisfied amount of the judgment and seeking to obtain an order transferring Lotz’s partnership interests to him as a partial…”

Stewart v. Lanier Park Med. Off. Bldg., Ltd., 578 S.E.2d 572 (Ga. Ct. App. 2003). · cites it 10× “Stewart contends that the trial court erred in granting Lanier Park a charging order against his partnership interest because Lanier Park was not a judgment creditor for purposes of OCGA § 14-9A-52. According to Stewart, the earlier judgment was not final inasmuch as two of his…”

Mahalo Investments III, LLC v. First Citizens Bank & Trust Co., Inc., 769 S.E.2d 154 (Ga. Ct. App. 2015). · cites it 4× “But both Georgia’s Uniform Limited Partnership Act, OCGA § 14-9A-52 (a), (“ULPA”) and Georgia’s Revised Uniform Limited Partnership Act, OCGA § 14-9-703 (a), (“RULPA”) 4 contain language similar to the language used in OCGA § 14-11-504 (a), authorizing a judgment creditor to…”

Gaslowitz v. Stabilis Fund I, LP, 770 S.E.2d 245 (Ga. Ct. App. 2015). · cites it 4× “204, 205 (2) ( 453 SE2d 780 ) (1995) (applying OCGA § 14-9A-52). 3 See OCGA § 14-11-502 (2) (providing that an assignee of an interest in a limited liability company is entitled to receive distributions to which an assignor was entitled, to the extent assigned).”

Res-ga Ypl, LLC v. Rowland Et Al., 798 S.E.2d 315 (Ga. Ct. App. 2017). · cites it 2× “7 But see OCGA § 14-9A-52 (a), (b) (“On due application toacourt of competent jurisdiction by any judgment creditor of a limited partner, the court may charge the interest of the indebted limited partner with payment of the unsatisfied amount of the judgment debt.”

Adam Gaslowitz v. Stabilis Fund I, Lp (Ga. Ct. App. 2015). · cites it 2× “” OCGA § 14-11- 7 We note that although Stabilis defends the relief ordered by the trial court, a review of Stabilis’s underlying petition shows that the accounting sought therein was for the “proceeds of G&A, LLC” to monitor and protect Stabilis’s rights, and not for an…”

Annotations are extracted automatically from the opinions in the Syfert caselaw corpus and ranked by authority, recency, and treatment. Dots show Syfertize treatment of the citing case itself.