Ohio Court Allows Issuance of Charging Orders Notwithstanding Uncertainty

                Ohio Court Allows Issuance of Charging Orders Notwithstanding Uncertainty

A recent admission from a Federal district court sitting in Ohio applying that states LLC Act found that changing orders could be issued not withstanding questions as to whether they would be ultimately effective. JobsOhio v. Emkey Energy, LLC, 2025 WL 2780920 (S.D. Ohio Sept. 30, 2025).

A company named RH energytrans, LLC borrowed $4 million from JobsOhio to complete a natural gas pipeline; EmKey Gathering LLC delivered in connection therewith a guarantee. Later EmKey Energy LLC assumed the loan agreement. Further, in connection with that assumption Risberg, EmKey Energy’s CEO, delivered another guarantee. After a short-term payment deferral during the Covid-19 pandemic payments did not resume, and JobsOhio accelerated the loan and filed suit to collect. Ultimately an agreed judgement was entered against EmKey Energy and EmKey Gathering for just less than $5 million. The next day JobsOhio sought the first of the charging orders that are the subject of this decision.

The first charging order sought to lien any distributions from either EmKey Gathering, LLC or EmKey Gas Processing, LLC to EmKey Energy. There was then sought another charging order as to EmKey Gathering’s interest in CGE Venture, LLC. There was as well a garnishment that is not otherwise the subject of this decision.​

As to the charging orders addressed to EmKey Gathering and EmKey Processing, EmKey Energy asserted that its interest in Gathering had already been assigned to a prior lender and that processing assets were encumbered to the effect that neither would be making distribution to Energy that could be subject to the charging order. Rejecting that argument as to EmKey’sinterest in Gathering, the Court wrote:

EmKey Energy suggests that no charging order can be issued against its membership interest in EmKey Gathering because this equity interest was pledged in 2011 to Amegy—and then later transferred from Amegy to Hallan—such that Hallan has been assigned the entirety of EmKey Energy’s membership interest in EmKey Gathering as part of consideration for loans.…. Even if EmKey Energy is not poised to receive immediate distributions from EmKey Gathering, Plaintiff is entitled to a charging order. That is because “[t]he priority of the charging order lien vis-à-vis other creditor claims against the judgment debtor is a matter governed by other law.” 1 Ribstein and Keatinge on Ltd. Liab. Cos. § 10:32 (June 2025 Update) (emphasis added). Courts issuing charging orders need not determine the “priority” of the order “over the judgment debtor’s other creditors orlienholders,” because “a hypothetical priority dispute in the future is not sufficient reason to prohibit the Court from entering such an order.” 2025 WL 2780920, *3.

As to the Processing charging order:

Next, EmKey Energy concedes that it “still retains its membership interest in EmKey Processing,” but argues that its “membership interest is of little value” in light of “prior and superior liens” on EmKey Processing’s assets, and the fact that EmKey Processing has never operated at a profit or had a distribution to EmKey Energy. (ECF No. 33 at 5). This argument is irrelevant. As previously noted, the existence of other liens does not invalidate a requested charging order. 1 Ribstein and Keatinge on Ltd. Liab. Cos. § 10:32 (June 2025 Update). 2025 WL 2780920, *4.

Turning to EmKey Gathering’s interest in CGE Venturo, it was again argued that no charging order may be issued when the interest has been assigned and, you guessed it, the Court said it did not matter:

This Court need not determine the nature of the purported assignment of EmKey Gathering’s membership interest at this juncture, as it agrees with Plaintiff that even if EmKey Gathering’s membership interest was assigned, such an assignment would not bar a charging order…. 2025 WL 2780920, *5.

I will just add that in addition to two citations to my favorite LLC treatise, this is a solid opinion; the challenges by so many judgment-debtors to the issuance of charging orders as to LLCs and other unincorporated associations in which they have an interest on the basis of “there is no value there” are and should be self-defeating.  If there is no value there why are you spending time and energy seeking to avoid the charging order?  The lady doesth protest too greatly?