Vaughn v. Farhat (2026)

Court: Court of Appeals of Virginia · Published opinion: April 21, 2026 · Record: 0162-25-2 · Author: Judge Mary Bennett Malveaux.

Facts

Vaughn obtained a USD 6,350,000 judgment and charging orders on Farhat’s interests in four LLCs. Two were single-member companies. The circuit court granted the charging orders but declined a requested sheriff’s foreclosure auction; the appeal challenged refusal to foreclose the sole-member interests. Official opinion, pp. 1–4.

Holding

Section 13.1-1041.1 does not authorize foreclosure of an LLC interest pursuant to a charging order, including the single-member interests at issue. Affirmed. Opinion, pp. 4–6.

Reasoning

The creditor receives only distributions; the statute declares the charging order exclusive. Its former foreclosure provision was removed in 2006 and cannot be restored through interpretation. The court acknowledged the creditor’s policy concern but left statutory alteration to the legislature. Opinion, pp. 5–6 and note 3.

Practical impact

A charging order is not authority to auction sole-member ownership or sell company assets for a member’s personal judgment. The opinion expressly leaves other collection avenues under other law open; it does not decide bankruptcy, consensual security enforcement or company-level creditor remedies. Opinion, p. 6.

Good-law status

Subsequent history and current precedential status are needs_verification. The published decision was captured again in full from the official court host on October 18, 2026; no later appellate decision on review was retrieved. The current statutory text matches the operative exclusive-remedy language. Comprehensive subsequent appellate history remains unverified. Section 13.1-1041.1.

Applies in →

virginia · businesses-and-going-concerns

Legal information, not legal advice. Verify subsequent treatment before relying on this decision in a particular collection proceeding.