Florida Legislature Adopts the Olmstead “Patch” Clarifying the Rights of Judgment Creditors of Members of Florida Limited Liability Companies

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The Florida Legislature recently passed legislation designed to resolve the uncertainties created with respect to Florida limited liability companies (“LLCs”) by the Florida Supreme Court’s holding in Olmstead v. Federal Trade Commission, 44 So. 3d 76 (Florida 2010). The legislation, which became effective on May 31, 2011, modifies Section 608.433, Florida Statutes (dealing with the rights of an assignee to become a member of a limited liability company) and is commonly called the “Olmstead Patch.” The Olmstead Patch clarifies that the holding in the Olmstead case does not apply to multi-member limited liability companies (“MMLLCs”), and that the sole and exclusive remedy for a judgment creditor of a member of a MMLLC is a charging order on the member’s transferable interest. The Olmstead Patch also provides clarity as to the “rules of the road” for judgment creditors who, in appropriate circumstances, will now have the right to foreclose on the membership interest of a judgment debtor’s single member LLC (“SMLLC”). A copy of the Olmstead Patch legislation can be found here (please see full update below for links).

Please see full update below for more information and links.

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Published In: Business Organization Updates, Civil Remedies Updates, General Business Updates, Finance & Banking Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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