Gillet v. ZUPT, LLC (2017)

Citation: 523 S.W.3d 749 · Court: Court of Appeals of Texas, Houston (14th Dist.) (No. 14-15-01033-CV) · Decided: February 23, 2017 · Opinion: Boyce, J.

Source note (2026-10-18):

• Links on this page to https://static.case.law/sw3d/523/cases/0749-01.json are an (unofficial Caselaw Access Project copy, retrieved before 2026-10-18; host disallows automated access); no official or otherwise permitted full-text copy was located on 2026-10-18.

Source: opinion text from the Caselaw Access Project at the source_url, retrieved 2026-10-16.

Facts

Gillet, a 45% member of ZUPT, LLC, sued to force a buyout; ZUPT counterclaimed for disclosure of trade secrets. An arbitrator awarded damages both ways, and the confirmed judgment provided that on payment of the buyout award Gillet’s ownership interest would end. ZUPT obtained a turnover order and a receiver to collect its own award, including turnover of Gillet’s membership interest.

Holding

Reversed and remanded in part. (1) Turnover of the membership interest was proper: the charging order of Bus. Orgs. Code § 101.112 “was not the exclusive remedy available to ZUPT,” because the judgment creditor was the LLC itself and the judgment expressly awarded the interest. (2) The order was otherwise defective — it reached categories of assets without evidence that they existed, and it did not guarantee Gillet the credit the judgment required in exchange for his interest.

Reasoning

• Section 101.112 makes a charging order — a lien on the membership interest that “may not be foreclosed” — the exclusive remedy of a member’s judgment creditor, so as to keep a creditor of one member from disrupting the company’s business by forcing an execution sale of the interest.
• That purpose does not apply where the creditor is the company from which the interest derives, and this judgment awarded the interest itself rather than a money sum to be collected by forced sale.
• The turnover statute (CPRC § 31.002) reaches property not readily subject to ordinary process, but only property shown by some evidence to exist.

Practical impact

For a buyer or creditor, a judgment creditor cannot foreclose its charging-order lien; the exception is narrow — the company itself, holding a judgment that awards the interest. For a member/debtor, the charging-order shield holds against outside judgment creditors, and turnover orders must be backed by evidence of each asset class.

Good-law status

The original CAP retrieval is preserved. A new attempt returned HTTP 403; the full 15-page court opinion was independently retrieved at independent_source_url on 2026-10-17. The current BOC § 101.112 retains the charging-order and single-member rules. The current CPRC § 31.002 no longer contains the historical hard-to-reach-property condition and permits an order without identifying specific assets (§ 31.002(h)); do not present all of the opinion’s historical procedural language as the current statute. The case’s narrow interest-award holding is verified; later judicial treatment and full currency remain needs_verification.

Applies in →

texas