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Committee adopts banker‑requested amendment to clarify foreclosure rights on LLC membership interests
Summary
Senate Bill 319 was amended to clarify that a perfected lien against an LLC membership interest may be foreclosed; sponsors said the change aligns Arkansas law with Texas‑style charging order protections and prevents creditors from taking ownership of members’ LLC interests.
Representative John Maddox told the committee an agreed amendment to Senate Bill 319 was drafted with input from the bankers’ association to clarify one point: if a bank holds a perfected lien on an LLC membership interest, the amendment makes clear how foreclosure on that perfected lien may proceed.
Maddox said the amendment “just makes it very clear that if a bank has a perfected lien against a membership interest of an LLC, then they can foreclose upon that…
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