IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

ARAYOS, LLC, )

 )

Plaintiff, )

)

v. ) MISC. ACTION 15-0027-WS-M

 )

JIMMIE ELLIS, et al., )

 )

Defendants. )

ORDER

This miscellaneous action comes before the Court on plaintiff’s Application for Charging 

Order against John M. Vellianitis (doc. 12).

On December 1, 2015, plaintiff, Arayos, LLC, registered in this judicial district a 

Judgment (doc. 2) entered by the United States District Court for the District of Maine on 

October 26, 2015. This Judgment was a default judgment in favor of Arayos, LLC and against 

John M. Vellianitis and various other defendants, jointly and severally, in the amounts of 

$590,618.22, plus post-judgment interest, as to Counts II, III, and X; an additional $600,000.00 

in statutory damages, plus post-judgment interest as to Count VIII; reasonable attorney’s fees of 

$64,467.50; and $33,125.00 for fees and costs incurred in pre-suit services on non-litigation 

related tasks. Plaintiff represents that, at present, the Judgment balance remains at 

$1,288,210.72, exclusive of accrued interest and costs, meaning that to date plaintiff has 

collected precisely nothing on the Judgment. (Doc. 12, ¶ 1.)

In furtherance of its ongoing (and thus far unsuccessful) collection efforts, Arayos now 

seeks issuance of a charging order against Vellianitis’s interests in the following limited liability 

companies: VMJ, LLC; JPV Hospitality Group, LLC; Lodge Entertainment, LLC; and 

Jonesboro Investments, LLC. The first two of these LLCs were formed in Alabama, while the 

third and fourth are foreign limited liability companies, formed in Wyoming and Nevada, 

respectively. Plaintiff submits records from the Alabama Secretary of State purporting to show 

that Vellianitis is a member of each of these LLCs; however, only the records for VMJ and JPV 

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Hospitality list Vellianitis as a member or manager, as the other two identify him as merely the 

LLC’s registered agent in Alabama. (Doc. 12, Exh. A.) Plaintiff’s counsel represents that he 

mailed a copy of this Application for Charging Order to Vellianitis. To date, Vellianitis has filed 

neither objection nor opposition to the Application.

The relevant Alabama statute provides, in part, as follows: “On application to a court of 

competent jurisdiction by any judgment creditor of a member or assignee, the court may charge 

the interest of the member or assignee with payment of the unsatisfied amount of the judgment 

with interest. To the extent so charged, the judgment creditor has only the rights of an assignee 

of financial rights.” Ala. Code § 10A-5-6.05(a).1 The statutory requirements for issuance of a 

charging order are satisfied here as to VMJ, LLC and JPV Hospitality Group, LLC, both of 

which are Alabama limited liability companies clearly within the ambit of the charging order 

statute on which plaintiff relies. 

The same conclusion does not hold true for Lodge Entertainment, LLC and Jonesboro 

Investments, LLC. As an initial matter, plaintiff has made no showing that Vellianitis is a 

member of either of these entities. More importantly, as noted supra, plaintiff’s filings reflect 

that Lodge Entertainment is a Wyoming limited liability company, and that Jonesboro 

Investments is a Nevada limited liability company. Plaintiff has presented no argument 

explaining why it contends a provision of the Alabama Business and Nonprofit Entities Code 

would empower this Court to issue a charging order as to a judgment debtor’s membership 

interest in Wyoming and Nevada limited liability companies, as part and parcel of the judgment 

 1 This Alabama statute governs plaintiff’s request because “[t]he procedure on 

execution – and in proceedings supplementary to and in aid of judgment or execution – must 

accord with the procedure of the state where the court is located, but a federal statute governs to 

the extent it applies.” Rule 69(a)(1), Fed.R.Civ.P.; see generally Regions Bank v. Stewart, 2011 

WL 1827453 (S.D. Ala. May 10, 2011) (discussing and applying Alabama charging order 

procedure by which judgment creditor may execute on judgment debtor’s interest in limited 

liability company). Also, the Court recognizes that the Alabama legislature enacted a new 

charging order statute, found at Alabama Code § 10A-5A-5.03, as part of the Alabama Limited 

Liability Company Law of 2014. At present, however, this new statute governs only “a limited 

liability company formed on or after January 1, 2015.” Ala. Code § 10A-5A-12.01. The 

information before the Court shows that the four LLCs at issue were formed prior to January 1, 

2015; therefore, the earlier iteration of the charging order statute found at § 10A-5-6.05(a) 

governs here.

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creditor’s efforts to enforce a judgment entered by a federal court in Maine.

2

 On its face, 

Alabama Code § 10A-5-6.05(a) does not appear to authorize issuance of charging orders relating 

to foreign limited liability companies.

3

 2 To be sure, plaintiff states in conclusory fashion that “[t]his Court has jurisdiction 

over Vellianitis [sic] interest in his limited liability companies,” and cites two cases in which 

judges of this District Court have entered charging orders pursuant to Alabama law as to foreign 

limited liability companies. However, the cited cases articulate no reasoning for their expansive 

application of Alabama Code § 10A-5-6.05. Besides, both of those cited cases involved 

judgments issued by the U.S. District Court for the Southern District of Alabama, such that the 

charging orders were issued by the court to enforce its own judgment. By contrast, this Court –

and this jurisdiction – has nothing to do with the underlying judgment that Arayos, LLC, is 

trying to enforce. Its only connection to this dispute is, ostensibly, that Vellianitis lives in this 

district (although plaintiffs submits no proof whatsoever to establish such a jurisdictional fact) 

and is a member of two LLCs organized and formed in the State of Alabama. The Alabama 

authorities cited by plaintiff cannot persuasively be read as authorizing this Court, based on such 

a tenuous connection to the dispute and the absence of supporting language in the applicable

charging order statute, to issue charging orders under Alabama law as to limited liability 

companies formed in Wyoming and Nevada. And plaintiff’s citations to a pair of unpublished 

state trial-court opinions interpreting the Connecticut charging order statute to allow charging 

orders to be applied to foreign LLCs are unavailing absent a showing (which has not been made) 

that the Connecticut statute is identical or even substantially similar to Alabama Code § 10A-5-

6.05(a) in all material respects. Even if the two states’ statutes were the same, the Connecticut 

decisions are unhelpful because of the minimalist reasoning employed (which essentially boils 

down to the state trial judge’s assessment that the Connecticut statute does not expressly forbid 

issuance of charging orders to foreign LLCs).

3 The Alabama statute cited by Arayos allows charging orders to issue as to the 

interest of a “member.” Ala. Code § 10A-5-6.05. “Member” is statutorily defined as “[a] person 

reflected in the required records of a limited liability company as the owner of some governance 

rights of a membership interest in the limited liability company.” Ala. Code § 10A-5-1.02(7). 

The term “limited liability company” is likewise defined as “[a]n organization that is formed and 

existing under this chapter,” Ala. Code § 10A-5-1.02(6), meaning Chapter 5 of Title 10A of the 

Alabama Code. Neither Lodge Entertainment, LLC, nor Jonesboro Investments, LLC, is an 

organization “formed and existing” under that chapter; therefore, the charging order provisions 

of § 10A-5-6.05 do not appear to reach those entities because Vellianitis would not qualify as a 

“member” of a “limited liability company,” as those terms are defined by the statute. Again, 

plaintiff has made no showing to the contrary. Moreover, although there appears to be precious 

little case authority on this point, at least one appellate decision from a jurisdiction with an 

analogous statute supports this result. See, e.g., Fannie Mae v. Heather Apartments Ltd. 

Partnership, 2013 WL 6223564, *6 (Minn.App. Dec. 2, 2013) (charging order unavailable 

because Minnesota charging order statute applies only to a limited liability company “organized 

or governed by this chapter,” whereas subject LLC was organized in and governed by laws of the 

Cook Islands).

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For the foregoing reasons, plaintiff’s Application for Charging Order against John M. 

Vellianitis (doc. 12) is granted in part, and denied in part. It is therefore ordered that the 

individual financial interests of defendant John M. Vellianitis in VMJ, LLC, and JPV Hospitality 

Group, LLC, be charged with payment of the Judgment rendered by the U.S. District Court for 

the District of Maine in favor of Arayos, LLC, on October 26, 2015 in the amount of 

$1,288,210.72, plus accrued interest thereon and costs, less any payments made or credits 

received. It is further ordered that VMJ, LLC and JPV Hospitality Group, LLC, must report to 

Arayos, LLC each time a distribution is made with respect to any transferable interest (listing the 

amount and time of all distributions made in connection with that distribution), and must further 

distribute to Arayos any amounts that become due or distributable to John M. Vellianitis. The 

Application for Charging Order is denied as to Lodge Entertainment, LLC, and Jonesboro 

Investments, LLC. In the absence of a legal showing by plaintiff (which has not been made) that 

the Alabama charging order statute authorizes orders charging a judgment debtor’s membership 

interest in a foreign LLC, no such order will issue from this Court charging Vellianitis’s interests 

(if any) in those foreign limited liability companies pursuant to Alabama Code § 10A-5-6.05(a).

DONE and ORDERED this 25th day of April, 2016.

s/ WILLIAM H. STEELE 

CHIEF UNITED STATES DISTRICT JUDGE

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