Charging Order Against Three LLCs Reversed
After a judgment had already been entered, the defendant hired Dinsmore to represent him in connection with the plaintiffs’ collection efforts. The plaintiffs claimed our client was a member of three limited liability companies, and they asked the trial court to charge his alleged membership interests. We opposed the plaintiffs’ motion for charging order because our client was not an owner of any of the LLCs, as evidenced by their operating agreements. Nevertheless, the trial court granted the plaintiffs’ request. The First District Court of Appeals reversed, finding the trial court “lacked competent evidence of [our client’s] membership” in the companies. The First District held: “when determining if an individual is a member of a limited liability company for the purpose of R.C. 1705.19, the trial court must consider records maintained by the company for the purpose of its corporate governance that name those owners entitled to receive distributions and share in the profits and losses of the company.” Because “the only records of the limited liability companies before the trial court established” that our client was not a member of the LLCs, the trial court erred in granting the plaintiffs’ motion for charging order.