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Partnership Property, Creditors

One of the benefits of a limited partnership is to protect against liabilities. A partner’s individual creditors cannot attach or encumber partnership property to satisfy a partner’s individual debt. Section 358.250, RSMo; Anchor Centre Partners, Ltd. v. Mercantile Bank, N.A., 803 S.W.23, 31 (Mo. 1991). This flows from a partner’s inability to assign his or her rights in specific partnership property. Accordingly, partnership property is typically only reachable by partnership creditors.

A “charging order” is somewhat of an exception to this rule. A charging order is “a post-judgment remedy that allows the judgment creditor of an individual debtor-member of a limited liability company (or a partnership) to enforce a judgment by charging the individual member’s distributional interest with the unsatisfied amount of a judgment.” Regions Bank v. Alverne Associates, LLC, 456 S.W.3d 52, 56 (Mo. Ct. App. 2014).

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