Court Issues Charging
Order, Avoids Question of Priority
In a recent decision from a
federal district court sitting in New Jersey, it both entered a charging order
and determined it would not address the question of that charging order’s
priority over an already existing lien. Government
Employees Insurance Co. v. Hamilton Healthcare Center, P.C., Civ. No.
17-674, 2019 WL 251740 (D. N.J. Jan. 17, 2019).
Various persons affiliated with
the Hamilton Healthcare Center were found to have engaged in insurance fraud. A
judgment exceeding $2.3 million was entered against them. One of those judgment
debtors, Kahn, had ownership interests in Pennsauken Diagnostic Center, LLC and
Professional Medical Resource Management, LLC. The judgment creditor sought a
charging order against Kahn’s interest in each of those companies. In
accordance with New Jersey law on charging orders, that charging order was
awarded the judgment creditor.
Apparently as a defense to the
issuance of the charging order, it was asserted that the law firm Stark and
Stark had a lien on Kahn’s interest in each of these LLCs, and those liens
should have priority over the charging order addressed in this opinion. The
court noted, however, that Stark and Stark is not a party to this case, and on
that basis declined to address the priority of its lien over this charging
order.
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