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Vaughn v. Farhat: Charging Order Exclusive LLC Remedy

The Court of Appeals of Virginia affirmed the trial court's decision declining to foreclose on Farhat's interests in four single-member LLCs in an action to enforce a $6.35 million judgment. The appellate court held that a charging order under Code § 13.1-1041.1(D) is the exclusive statutory remedy available to a judgment creditor seeking to satisfy a debt from a debtor's transferable interest in an LLC; courts lack authority to order foreclosure or public auction of those interests. The only right conveyed by a charging order is to receive distributions.