KRS § 378A.080 — KY Code / Title XXXI / Chapter 378A / Section 378A.080
378A.080 Defenses, liability, and protection of transferee or obligee
Status: in_force

378A.080 Defenses, liability, and protection of transferee or obligee.

(1) A transfer or obligation is not voidable under KRS 378A.040(1)(a) against a person

that took in good faith and for a reasonably equivalent value given the debtor or

against any subsequent transferee or obligee.

(2) To the extent a transfer is avoidable in an action by a creditor under KRS

378A.070(1)(a), the following rules apply:

(a) Except as otherwise provided in this section, the creditor may recover

judgment for the value of the asset transferred, as adjusted under subsection

(3) of this section, or the amount necessary to satisfy the creditor's claim,

whichever is less. The judgment may be entered against:

1. The first transferee of the asset or the person for whose benefit the

transfer was made; or

2. An immediate or mediate transferee of the first transferee, other than:

a. A good-faith transferee that took for value; or

b. An immediate or mediate good-faith transferee of a person

described in subdivision a. of this subparagraph; and

(b) Recovery pursuant to KRS 378A.070(1)(a) or (b) of or from the asset

transferred or its proceeds, by levy or otherwise, is available only against a

person described in subsection (2)(a)1. or 2. of this section.

(3) If the judgment under subsection (2) of this section is based upon the value of the

asset transferred, the judgment shall be for an amount equal to the value of the asset

at the time of the transfer, subject to adjustment as the equities may require.

(4) Notwithstanding voidability of a transfer or an obligation under this chapter, a

good-faith transferee or obligee is entitled, to the extent of the value given the

debtor for the transfer or obligation, to:

(a) A lien on or a right to retain an interest in the asset transferred;

(b) Enforcement of an obligation incurred; or

(c) A reduction in the amount of the liability on the judgment.

(5) A transfer is not voidable under KRS 378A.040(1)(b) or 378A.050 if the transfer

results from:

(a) Termination of a lease upon default by the debtor when the termination is

pursuant to the lease and applicable law; or

(b) Enforcement of a security interest in compliance with Subtitle 9 of KRS

Chapter 355, other than acceptance of collateral in full or partial satisfaction

of the obligation it secures.

(6) A transfer is not voidable under KRS 378A.050(2):

(a) To the extent the insider gave new value to or for the benefit of the debtor

after the transfer was made, except to the extent the new value was secured by

a valid lien;

(b) If made in the ordinary course of business or financial affairs of the debtor and

the insider; or

(c) If made pursuant to a good-faith effort to rehabilitate the debtor and the

transfer secured present value given for that purpose as well as an antecedent

debt of the debtor.

(7) The following rules determine the burden of proving matters referred to in this

section:

(a) A party that seeks to invoke subsection (1), (4), (5), or (6) of this section has

the burden of proving the applicability of the subsection invoked;

(b) Except as otherwise provided in paragraphs (c) and (d) of this subsection, the

creditor has the burden of proving each applicable element of subsections (2)

or (3) of this section;

(c) The transferee has the burden of proving the applicability to the transferee of

subsection (2)(a)2.a. or b. of this section; and

(d) A party that seeks adjustment under subsection (3) of this section has the

burden of proving the adjustment.

(8) The standard of proof required to establish matters referred to in this section is

preponderance of the evidence.