In Burnett v. Spencer, 230 Md. App. 24 (2016), the Court of Special Appeals held that Maryland Rule 2-651 may be the basis for a court to enter a charging order against a corporate interest held by a judgment creditor.
Cereta Spencer was awarded $3,700,000 by the Circuit Court for Baltimore County in her divorce from Steven Burnett, and she obtained judgments against him totaling over $2.5 million, which she had difficulty collecting. She was able to get the circuit court to charge Burnett's interests in CAEI Corporation, of which Burnett was the principal shareholder, under Rule 2 651.
The Court of Special Appeals affirmed the decision of the trial court, ruling that the so-called "wild card" provision for collecting judgments contained in Rule 2-651 is effective even though there is no statute that provides a charging order as a remedy against shareholders in favor of their creditors.
As a result of the decisions of the circuit court and of the Court of Special Appeals, Spencer's chances of collection are substantially enhanced.
For questions, please contact Ed Levin (410) 576-1900.