Connecticut

Warning: The following opinion is provided for purposes of discussion only. We have not Shepardized™ this opinion, and do not know the subsequent disposition of this case nor whether the effect of the opinion has been overruled or superceded by other law.

Cadle Company v. Robert A. Ginsburg,
No. CV950076811S (Conn.Super. 03/28/2002)

CV950076811S

SUPERIOR COURT OF CONNECTICUT, JUDICIAL DISTRICT OF ANSONIA - MILFORD, AT MILFORD

March 28, 2002, Decided

March 28, 2002, Filed

NOTICE: [*1] THIS DECISION IS UNREPORTED AND MAY BE SUBJECT TO FURTHER APPELLATE REVIEW. COUNSEL IS CAUTIONED TO MAKE AN INDEPENDENT DETERMINATION OF THE STATUS OF THIS CASE.

DISPOSITION: Plaintiff's application for a charging order granted.

JUDGES: Judge Jon M. Alander.

OPINIONBY: Jon M. Alander

OPINION: MEMORANDUM OF DECISION

The plaintiff has applied to this court pursuant to General Statutes § 34-171 for a charging order against the defendant's interest in Jai Alai Associates, LLC, a limited liability company. The defendant has filed an objection to the issuance of a charging order claiming that Jai Alai Associates, LLC and the Internal Revenue Service must first be made parties to the action. The defendant also contends that no charging order may issue because to do so would allow an unlicensed individual to hold an interest in a jai alai organization in contravention of state law. The court finds that the defendant's objections lack merit and the plaintiff is entitled to a charging order.

Pursuant to General Statutes § 34-171, a judgment creditor of a member of a limited liability corporation may obtain a court order charging the member's interest [*2] in the limited liability company with payment of the unsatisfied amount of the judgment with interest. n1 The plaintiff is a judgment creditor of the defendant by means of a judgment in the amount of $ 161,643.88 entered in its favor against the defendant on August 6, 1997. On November 24, 1997 the court awarded the plaintiff an additional $ 15,000 in attorneys fees.

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n1 Section 34-171 provides that "On application to a court of competent jurisdiction by any judgment creditor of a member, the court may charge the member's limited liability company interest with payment of the unsatisfied amount of the judgment with interest."

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The defendant maintains that a charging order may not issue because Jai Alai Associates, LLC has not been made a party to this action. The defendant cites no authority for his position and the court can find no statutory or common law support for such a claim.

The statute governing the issuance of a charging order against a limited liability company, § 34-171, does not require that [*3] the limited liability company be made a party to an action seeking such an order. It is not necessary to make a limited liability company a party because a charging order merely gives the judgment creditor the rights of an assignee of the member's interest in the limited liability company. See General Statutes § 34-171. Pursuant to the Connecticut Limited Liability Company Act, General Statutes §§ 34-100 to 34-242, an assignment of a limited liability company interest entitles the assignee to receive only the distributions to which the assignor would be entitled. See General Statutes § 34-170(a)(2). An assignment does not dissolve the limited liability company or entitle the assignee to participate in the management and affairs of the limited liability company or to become or exercise any rights of a member. See General Statutes § 34-170(a)(3). An action seeking a charging order does not impact the rights or interests of a limited liability company to the degree necessary to require that it be made a party in order for the action to proceed.

The defendant's claim that the Internal [*4] Revenue Service must first be made a party is equally without merit. The defendant asserts that the Internal Revenue Service must be made a party because it has or may claim a lien on the defendant's interest in the limited liability company. Again, the defendant cites no authority for this proposition. It is not necessary for the Internal Revenue Service to be made a party as any charging order will be subject to any superior rights that the Internal Revenue Service may have in the defendant's interest in the limited liability company.

Finally, the defendant contends that a charging order may not issue because under Connecticut law no interest in a jai alai business may be held by an unlicensed individual. Any individual or business engaging in jai alai in Connecticut must attain the appropriate license. See General Statutes § 12-574. This requirement does not prevent the issuance of a charging order pursuant to § 34-171 against an individual's interest in a limited liability company engaged in the jai alai business. As noted previously, a charging order merely gives the judgment creditor the rights of an assignee of the member's interest in the limited [*5] liability company, § 34-170(a)(2), and does not entitle the assignee to participate in the management and affairs of the limited liability company or to become or exercise any rights of a member, § 34-170(a)(3).

Pursuant to § 34-171, the plaintiff is entitled to an order charging the defendant's interest in Jai Alai Associates, LLC. Accordingly, the plaintiff's application for a charging order is granted. The interest of the defendant in Jai Alai Associates, LLC is hereby charged with the payment of the judgment entered in this action. Jai Alai Associates, LLC shall promptly remit to the plaintiff all the distributions of cash, profits and assets of the limited liability company to which the defendant would otherwise be entitled until said judgment is satisfied. n2

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n2 The court declines at this time to grant the plaintiff's request that it issue an order appointing a receiver or an order requiring the disclosure of the books and records of Jai Alai Associates, LLC. There has been no showing that such orders are necessary to insure compliance with the charging order. Should compliance not be forthcoming, the plaintiff is free to reassert its request.

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BY THE COURT

Judge Jon M. Alander

Cadle Company v. Robert A. Ginsburg, No. CV950076811S (Conn. 05/16/2002)

CV950076811S

SUPERIOR COURT OF CONNECTICUT, JUDICIAL DISTRICT OF ANSONIA - MILFORD, AT MILFORD

May 16, 2002, Decided

May 16, 2002, Filed

NOTICE: [*1] THIS DECISION IS UNREPORTED AND MAY BE SUBJECT TO FURTHER APPELLATE REVIEW. COUNSEL IS CAUTIONED TO MAKE AN INDEPENDENT DETERMINATION OF THE STATUS OF THIS CASE.

JUDGES: Jon M. Alander, Judge.

OPINIONBY: Jon M. Alander

OPINION: MEMORANDUM OF DECISION

The court intended its memorandum of decision dated March 28, 2002 [31 Conn. L. Rptr. 597] concerning the plaintiff's application pursuant to General Statutes § 34-171 for a charging order to constitute the issuance of a charging order against the defendant's interest in Jai Alai Associates, LLC, a limited liability company. In order to remove any doubt that a charging order was issued by this court on that date, I have signed the attached separate charging order to reflect the court's actions on March 28, 2002.

BY THE COURT

Judge Jon M. Alander

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