Inman: Are Charging Orders Entitled To Full Faith & Credit?

You see the advertisements all the time: “Form your LLC in Wyoming!” or “Create your LLC in Delaware”, or “Get the Nevada Advantage with Your LLC!”
Several states have healthy industries that consist of little more than forming corporate entities in those states. They often attract such business by making claims that the laws of their states are more debtor-friendly than those of other states, thus presumably providing greater asset protection for the owner.
In most states, Limited Liability Companies (LLCs) and partnerships in their most common variations (GPs, LP, LLPs, and LLLPs) have a benefit that corporation do not, which is that creditors cannot simply levy on the stock in such entities — they have no stock, technically — but instead creditors must obtain a “charging order” that has the effect of placing a lien on the debtor’s interest. That lien operates to pay to the creditor if any distributions are made to the debtor’s interest, but if not distributions are made then the creditor gets nothing, and the creditor is not normally entitled to take assets out of the entity either.
As mentioned, a few states claim to have “better charging order laws”, which means charging order laws that are more friendly to debtors and less friendly to creditors. Presumably, so says the marketing of those from these few states, a creditor will be stymied by their states laws and unable to obtain a creditor-friendly charging order.
But that theory hinges on the real question: Whose law applies? If somebody forms, say, a Wyoming LLC, but the LLC is actually doing business in California such that the California courts could enter their own charging order against the entity, must Wyoming respect the California court’s judgment even if the opposite decision might have been reached under Wyoming law?
This issue comes down to one involving the U.S. Constitution, and more particularly the Full Faith & Credit clause that says that the courts of one state must respect and give power to an order of the courts of other states, just as if a court in-state had issued that order.
That brings us to today’s question:
Is a Charging Order the sort of order that is entitled to Full Faith & Credit by the courts of other states? A recent opinion from a federal bankruptcy court says “Yes”. In re Inman, 2012 WL 2309359 (Bkrtcy.S.D.Fla., Slip Copy, June 18, 2012). http://goo.gl/A0S2Z
In essence, Husband and Wife divorced in Florida with Husband to make $1 million in alimony payments to Wife over some years. By agreement, these payments were to be secured by liens on certain assets, including on Husband’s interests in three Colorado entities that were apparently investing in real estate there.
Husband, however, did not fulfill his promise to secure the liens on the Colorado entities. Wife then obtained a Florida judgment on the divorce agreement, which she domesticated in Colorado and sought won charging orders against Husband’s interests in all three Colorado entities.
Back in Florida, the Husband then filed for Chapter 11 bankruptcy, and the Wife timely filed her Proof of Claim to which she attached the Florida judgment and the Colorado charging orders.
In the ensuing adversary action, the Husband attempted to challenge the Colorado charging orders, arguing that those charging orders should not be given Full Faith and Credit by the Federal Bankruptcy Court sitting in Florida. But the Court disagreed:

http://www.forbes.com/sites/jayadkisson/2012/06/30/inman-are-charging-orders-entitled-to-full-faith-credit/