Law v. Zemp (2018)
Citation: 362 Or 302, 408 P3d 1045 · Court: Supreme Court of Oregon (opinion by Walters, J.) · Decided: January 11, 2018 (argued May 11, 2017) · On review from: Law v. Zemp, 276 Or App 652, 368 P3d 821, adh’d to on recons, 279 Or App 808, 381 P3d 1099 (2016) (Nos. S064387, S064415)
Facts
Plaintiff held a 2012 money judgment against Ronald Zemp, a general partner in four limited partnerships and a member of a limited liability company (Forever Young Oregon, LLC). On plaintiff’s motion under ORS 70.295 and ORS 63.259, the circuit court issued a charging order against Zemp’s interests and added ancillary provisions requiring the companies to give plaintiff extensive financial information and to refrain from certain transactions. The Court of Appeals held some of those provisions unauthorized, including all of them as to the LLC under ORS 63.259.
Holding
A trial court has general or specific statutory authority — ORS 70.295 for limited partnerships and ORS 1.160 for LLCs — to include in a charging order ancillary provisions “that it finds necessary to allow a judgment creditor access to a debtor-partner’s distributional interest in a company, as long as those provisions do not unduly interfere with the company’s management.” The record did not show that standard was met, so the ancillary provisions should have been stricken. Court of Appeals reversed; circuit-court order vacated; remanded.
Reasoning
A charging order is a creature of statute (from UPA § 28) meant to give the creditor the debtor’s economic interest while keeping creditors out of management. ORS 63.259 gives the creditor “only the rights of an assignee,” which under ORS 63.249(3) means distributions and allocations but no management or voting rights. The court rejected the companies’ argument that the charging-order statutes are “exclusive” remedies that bar any ancillary order, holding that ORS 1.160 lets a court take steps necessary to carry out the task ORS 63.259 assigns — but only within that task. The opinion notes that the UPA implied courts could direct a sale of the partner’s interest (UPA § 28(2)), but the case did not involve and did not decide a foreclosure sale.
Practical impact
For creditors and buyers, a charging order against an Oregon LLC member gives assignee economic rights without itself making an assignment; disclosure or transaction-restriction orders require evidence that they are needed and do not unduly interfere with management. Whether a charged Oregon LLC interest can be sold at foreclosure remains open (contrast ORS 67.205(2) for general partnerships, which expressly allows foreclosure). For debtors and co-owners, the decision limits intrusive charging-order terms.
An actual assignment is a separate event. Current ORS 63.249(7) distinguishes a charge from an assignment, while ORS 63.245(2)(c) and 63.265(2)(b) provide default simultaneous admission when an assignment or sole-member cessation would otherwise leave no members, subject to the governing instruments. The decision does not erase those defaults or decide foreclosure authority. Its discussion of ORS 70.615 and 67.205 at pages 317–321 imports authority for the ancillary orders actually at issue; it is not an actual foreclosure-sale holding. Full current chapter 63; chapter 70.
Good-law status
needs_verification. The complete reported decision was independently retrieved on 2026-10-17. Its holding and disposition are verified; comprehensive later treatment, including the effect of subsequent legislation, has not been established. Finding a later citation or no adverse search result is not a good-law certification.
One later application was checked in full: SFG Commercial Aircraft Leasing Inc. v. Montgomery Equipment Co., No. 2:21-mc-00095 (S.D. W. Va. Mar. 10, 2023), Goodwin, J., court PDF, pp. 7–9. Applying West Virginia law, it used Law’s management-interference reasoning when limiting ancillary relief. It does not decide Oregon LLC foreclosure or establish exhaustive positive treatment of Law.
Applies in →
oregon · Topic: equity-interests-stock-llc-charging-orders
Legal information, not legal advice. Verify current law and subsequent treatment before relying on this decision.