One definite advantage is that Bob’s interest in a certificated security may be reached
by a judgment creditor only by actual seizure of the security certificate by the officer
making the attachment or levy. See, UCC 8112 (a). Thus, in dealing with certificated
securities, possession of the securities is the vital matter. Placing them in a Wyoming
safety deposit box, a service we provide, puts the certificates out of the easy reach of
a California (or other state) court.
Furthermore, the local law of the jurisdiction in which a security certificate is
located at the time of delivery governs whether an adverse claim can be asserted
against a person to whom the security certificate is delivered. See, UCC 8110 (c).
Delivery of a certificated security occurs when the purchaser acquires possession
of the security certificate. See, 8301 (a)(1).
Therefore, if Bob acquires possession of a security certificate in Wyoming, then
delivery of the security certificate occurs in Wyoming. As such, the law of Wyoming
(the jurisdiction in which the security certificate was located at the time of delivery)
governs whether an adverse claim can be asserted against Bob. In this way, even if
Bob is served with process in California, the California court may apply only those
stronger remedies against Bob’s Wyoming LLC membership interest that exist in
Wyoming, and not those weaker remedies that exist in California.
Thus, if a charging order against Bob’s LLC
membership interest is the exclusive remedy
in Wyoming, a California court must apply
Wyoming’s superior law to the case.
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