- previously known as -
Caution state law variances!
Does The Transferee Have A Defense?
If an avoidable transaction is found, then the next question is whether the Transferee has a defense. The UVTA provides for only two defenses:
Assuming the Creditor's action is timely, the Transferee is left with showing that the Transferee was in "good faith" and gave at least something of value to the Debtor in exchange — this latter clause will decide whether a good faith Transferee has a complete defense (if the Transferee gave "reasonably equivalent value" to the Debtor, or a possible partial defense (if the Transferee did not, but did give some lesser value). By inference, if a Transferee is not in good faith, then the Transferee is neither entitled to a full or partial defense, except as provided in §8(e) and (f).
The term "good faith" is not defined by the UVTA, so we must look to decisional law for guidance on its meaning.
Here we find yet another significant mis-organization of the UVTA. The Uniform Fraudulent Conveyances Act of 1918 did not separately provide for a good faith defense. Instead, that the Transferee was in good faith was part and parcel of the definition of "fair consideration" under §3 of the UFCA. When the UFCA became the UFTA in 1984, and the term "fair consideration" was discarded, a new §9(a) and (d) was created to provide for the defense of a Transferee in good faith. This made sense.
What didn't make sense was that in the new §9 of the UFTA, the drafters also included a new §9(b) and (c) which for the first time provided that a creditor could elect a money judgment to be paid by the Transferee instead of mere avoidance. These provisions should logically have been put in the also-new creditor's remedies section, which became §7 of the UFTA, but apparently because they also tested the Transferee's good faith, they were instead installed in §8.
What of the debtor's good faith? Other than being evidence to prove that the debtor did not have an intent to defraud his creditors, which of course is only and exclusively relevant to the Intent Test of § 4(a)(1), that the debtor may have acted in good faith in making the transfer is irrelevant.
UVTA - Logical Organization (Designed For Litigators)
Learn The Vocabulary Of The Act
Learn The Vocabulary Of The Act (Main Page)
Step 1: Has A Voidable Transaction Occurred?
Step 2: Does the Transferee Have A Defense?
Step 3: What Remedies Are Available?
Other Helpful Provisions
UVTA - Numerical Organization (Confusing & Difficult To Use)
The Uniform Law Commission's complete copy of the UVTA with comments in PDF format is available here. The webpage for the UVTA, showing states that have enacted and much other information regarding the Act is found here.
1 - Definitions
(1) Affiliate -- (2) Asset -- (3) Claim -- (4) Creditor -- (5) Debt -- (6) Debtor -- (7) Electronic -- (8) Insider -- (9) Lien -- (10) Organization -- (11) Person -- (12) Property -- (13) Record -- (14) Relative -- (15) Sign -- (16) Transfer -- (17) Valid Lien
2 - Insolvency
3 - Value
4 - Transfer Or Obligation Voidable As To Present Or Future Creditor
5 - Transfer or Obligation Voidable As To Present Creditor
8 - Defenses, Liability, And Protection Of Transferee Or Obligee
10 - Governing Law
15 - Short Title
Voidable Transaction Decision Chart
A chart to assist in the determination of whether a fraudulent transfer has occurred, whether the transferee has a defense, and if a useful remedy is available. Click here
A collection of useful articles and other resources on the Uniform Voidable Transactions Act and fraudulent transfer law generally, click here
Expert - Consultant - Litigation
Expert witness, litigation consulting, and litigation services offered by Jay D. Adkisson, click here
Other Websites By Jay Adkisson
About Jay Adkisson
Jay's personal webpage with his background, lists of his books and articles, and past and future speaking appearances, are found at jayadkisson.com
Captive Insurance Companies
Jay is the author of Adkisson's Captive Insurance Companies, which is the all-time best-selling work on the subject, and a collection of his musings and articles about captives are found at captiveinsurancecompanies.com
An examination, with Jay's commentary, about the so-called Harmonized Acts (the Uniform Partnership Act, the Uniform Limited Partnership Act, and the Uniform Limited Liability Company Act) as they relate to charging orders, and a collection of Jay's articles on the subject, is found at chargingorder.com
Jay's award-winning and frequently cited website regarding various tax schemes and financial scams, with a popular comment board for those scams, is found at quatloos.com
Riser Adkisson LLP
For the website of Jay's law firm, Riser Adkisson LLP, and information about his legal services, see risad.com
© 2017 Jay D. Adkisson. All rights reserved. No claim to government works or the works of the Uniform Law Commission. The information contained in this website is for general educational purposes only, does not constitute any legal advice or opinion, and should not be relied upon in relation to particular cases. Use this information at your own peril; it is no substitute for the legal advice or opinion of an attorney licensed to practice law in the appropriate jurisdiction. This site http://www.voidabletransactions.com