<html xmlns:v="urn:schemas-microsoft-com:vml" xmlns:o="urn:schemas-microsoft-com:office:office" xmlns:w="urn:schemas-microsoft-com:office:word" xmlns:m="http://schemas.microsoft.com/office/2004/12/omml" xmlns="http://www.w3.org/TR/REC-html40">
<head>
<meta http-equiv="Content-Type" content="text/html; charset=us-ascii">
<meta name="Generator" content="Microsoft Word 14 (filtered medium)">
<!--[if !mso]><style>v\:* {behavior:url(#default#VML);}
o\:* {behavior:url(#default#VML);}
w\:* {behavior:url(#default#VML);}
.shape {behavior:url(#default#VML);}
</style><![endif]--><style><!--
/* Font Definitions */
@font-face
{font-family:Calibri;
panose-1:2 15 5 2 2 2 4 3 2 4;}
@font-face
{font-family:Tahoma;
panose-1:2 11 6 4 3 5 4 4 2 4;}
@font-face
{font-family:"Arial Rounded MT Bold";}
/* Style Definitions */
p.MsoNormal, li.MsoNormal, div.MsoNormal
{margin:0in;
margin-bottom:.0001pt;
font-size:11.0pt;
font-family:"Calibri","sans-serif";}
a:link, span.MsoHyperlink
{mso-style-priority:99;
color:#0563C1;
text-decoration:underline;}
a:visited, span.MsoHyperlinkFollowed
{mso-style-priority:99;
color:#954F72;
text-decoration:underline;}
p.MsoAcetate, li.MsoAcetate, div.MsoAcetate
{mso-style-priority:99;
mso-style-link:"Balloon Text Char";
margin:0in;
margin-bottom:.0001pt;
font-size:8.0pt;
font-family:"Tahoma","sans-serif";}
p.msonormal0, li.msonormal0, div.msonormal0
{mso-style-name:msonormal;
mso-margin-top-alt:auto;
margin-right:0in;
mso-margin-bottom-alt:auto;
margin-left:0in;
font-size:11.0pt;
font-family:"Calibri","sans-serif";}
span.EmailStyle18
{mso-style-type:personal;
font-family:"Calibri","sans-serif";
color:windowtext;}
span.EmailStyle19
{mso-style-type:personal;
font-family:"Calibri","sans-serif";
color:windowtext;}
span.EmailStyle20
{mso-style-type:personal;
font-family:"Calibri","sans-serif";
color:windowtext;}
span.BalloonTextChar
{mso-style-name:"Balloon Text Char";
mso-style-priority:99;
mso-style-link:"Balloon Text";
font-family:"Tahoma","sans-serif";}
span.EmailStyle23
{mso-style-type:personal-reply;
font-family:"Calibri","sans-serif";
color:#1F497D;}
.MsoChpDefault
{mso-style-type:export-only;
font-size:10.0pt;}
@page WordSection1
{size:8.5in 11.0in;
margin:1.0in 1.0in 1.0in 1.0in;}
div.WordSection1
{page:WordSection1;}
--></style><!--[if gte mso 9]><xml>
<o:shapedefaults v:ext="edit" spidmax="1026" />
</xml><![endif]--><!--[if gte mso 9]><xml>
<o:shapelayout v:ext="edit">
<o:idmap v:ext="edit" data="1" />
</o:shapelayout></xml><![endif]-->
</head>
<body lang="EN-US" link="#0563C1" vlink="#954F72">
<div class="WordSection1">
<p class="MsoNormal"><span style="color:#1F497D">Wait, maybe I am all wet, but as I read that statute, it
<b><i>is</i></b> possible to foreclose on the member's transferable interest in the LLC, per
<a href="http://app.leg.wa.gov/RCW/default.aspx?cite=25.15&full=true#25.15.256">RCW 25.15.256(2)</a>. Subsection 1 allows a charging order akin to a garnishment on the member's interest, and subsection 2 allows foreclosure and sale/seizure of the interest itself.
Yes?<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">Admittedly the foreclosure only takes the debtor's "transferable interest," but if it's a single member LLC, if I represented a creditor I would foreclose on the 100% transferable interest. Then the creditor
would be a 100% transferee, there would be no existing "members" with voting rights, and therefore the creditor has the right to vote to be admitted as a member within 90 days after the transfer, per
<a href="http://app.leg.wa.gov/RCW/default.aspx?cite=25.15&full=true#25.15.265">RCW 25.15.265(4)</a>. The judgment creditor would thus effectively seize ownership and control of the LLC and its assets.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">Do you think that would work?<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<div>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">Sincerely,<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">Eric<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">Eric C. Nelsen<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">SAYRE LAW OFFICES, PLLC<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">1417 31st Ave South<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">Seattle WA 98144-3909<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">phone 206-625-0092<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">fax 206-625-9040<o:p></o:p></span></p>
</div>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<div>
<div style="border:none;border-top:solid #B5C4DF 1.0pt;padding:3.0pt 0in 0in 0in">
<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif"">From:</span></b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif""> wsbarp-bounces@lists.wsbarppt.com [mailto:wsbarp-bounces@lists.wsbarppt.com]
<b>On Behalf Of </b>Robert Pampell<br>
<b>Sent:</b> Monday, November 06, 2017 10:43 PM<br>
<b>To:</b> 'WSBA Real Property Listserv'<br>
<b>Subject:</b> Re: [WSBARP] Execution on judgement<o:p></o:p></span></p>
</div>
</div>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">No. See RCW Sec. <span lang="EN">25.15.256, esp. subsection (5). Known as “charging order exclusivity,” this subsection was added in the amendments effective 1/1/16.<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN"><o:p> </o:p></span></p>
<p class="MsoNormal"><span lang="EN">While you are at it, your client should be advised, as should all LLC clients should be, that single member LLCs “make lousy asset protection vehicles”, to quote a prominent national creditor rights/asset protection expert.
He was addressing the typical veil-piercing and alter ego flavor of asset protection, rather than the so-called “reverse veil-piercing” variety addressed by the section cited above.<o:p></o:p></span></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span style="font-size:6.0pt;font-family:"Arial","sans-serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:#1F497D"><img border="0" width="152" height="59" id="Picture_x0020_0" src="cid:image001.jpg@01D357A3.8D367B00" alt="21 Law logo - color (no tag) FB size for letterhead.jpg"></span><span style="font-size:9.5pt;font-family:"Arial","sans-serif";color:#1F497D"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:6.0pt;font-family:"Arial","sans-serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:#1F497D">Robert Pampell, Attorney<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:#1F497D">21st Century Law Office (r)<o:p></o:p></span></p>
<p class="MsoNormal" style="text-autospace:none"><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:#365F91">19125 Northcreek Parkway, Suite 120<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:#365F91">Bothell, WA 98011<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:#1F497D">voice: 425-329-2629<br>
fax: 877-640-6403<br>
cell: 425-501-4784<br>
email: </span><span style="color:#1F497D"><a href="mailto:rpampell@swcp.com" title="mailto:rpampell@swcp.com"><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:blue">rpampell@swcp.com</span></a></span><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:#1F497D"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><a href="http://www.linkedin.com/in/robertpampell"><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:blue">http://www.linkedin.com/in/robertpampell</span></a></span><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:#1F497D"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><a href="http://www.21stlawoffice.com/"><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:blue">www.21stLawOffice.com</span></a></span><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:#1F497D"><o:p></o:p></span></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<div>
<div style="border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in">
<p class="MsoNormal"><b>From:</b> <a href="mailto:wsbarp-bounces@lists.wsbarppt.com">
wsbarp-bounces@lists.wsbarppt.com</a> [<a href="mailto:wsbarp-bounces@lists.wsbarppt.com">mailto:wsbarp-bounces@lists.wsbarppt.com</a>]
<b>On Behalf Of </b>Craig Gourley<br>
<b>Sent:</b> Monday, November 06, 2017 3:41 PM<br>
<b>To:</b> <a href="mailto:wsbarp@lists.wsbarppt.com">wsbarp@lists.wsbarppt.com</a><br>
<b>Subject:</b> [WSBARP] Execution on judgement<o:p></o:p></p>
</div>
</div>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Listmates, <o:p></o:p></p>
<p class="MsoNormal">Client has a judgment against him personally and wants to acquire real property in a single member LLC. I know the judgment does not attach directly to the real property. My recollection is that the creditor can obtain a charging order
against the LLC and any distributions to the member would go to the judgment creditor. Can the judgment creditor execute against the personal property interest of the “ membership” thereby taking ownership of the LLC and the property it contains? Thanks
in advance for your insight. <o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><b><span style="font-size:14.0pt">Gourley Law Group<o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-size:12.0pt">Snohomish Escrow<o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-size:12.0pt">The Exchange Connection<o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-size:14.0pt"><o:p> </o:p></span></b></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial Rounded MT Bold"">1002 10<sup>th</sup> Street / PO Box 1091<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial Rounded MT Bold"">Snohomish, WA 98291<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial Rounded MT Bold""><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial Rounded MT Bold"">360.568.5065<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial Rounded MT Bold"">360.568.8092 fax<o:p></o:p></span></p>
<p class="MsoNormal"><u><span style="font-size:10.0pt;font-family:"Arial Rounded MT Bold";color:#0563C1"><a href="mailto:Craig@glgmail.com">Craig@glgmail.com</a></span></u><span style="font-size:10.0pt;font-family:"Arial Rounded MT Bold""><o:p></o:p></span></p>
<p class="MsoNormal"><o:p> </o:p></p>
</div>
</body>
</html>