Source: https://voidabletransactions.com/uvta-defenses.php
Timestamp: 2019-09-18 20:01:22
Document Index: 357182661

Matched Legal Cases: ['§8', '§3', '§9', '§9', '§9', '§7', '§8', '§ 4']

UVTA Defenses
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:
Statute of Extinguishment -- Because of the passage of time, the transfer is no longer actionable (often confused as a Statute of Limitation, which is not quite the same).
Transferee's Good Faith Defense -- The transferee was (1) in good faith, and (2) gave reasonably equivalent value in return for the transfer
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 AUDIO PRESENTATION
Need to become fluent in the UVTA quickly? This four-hour audio program by Jay Adkisson and Dave Slenn, ABA Advisors to the UVTA Drafting Committee, explains key features of the UVTA, how they operate, and why. Hosted by Leimberg Information Services. Click here for more
2019.05.30 ... Understanding The Elements Of The UVTA Tests For A Voidable Transaction
2019.05.20 ... Good Faith Not Enough For Transferee To Establish Fraudulent Transfer Defense In Hawk
2019.03.31 ... Voidability Of Sham Lawsuit And Judgment At Issue In Chen
2019.02.22 ... California Court Of Appeals Swings And Misses On Pre-Marital Fraudulent Transfer Agreement In Sturm
2019.02.12 ... Why The Mere Incorporation Or Formation Process For A New Entity Is Not A Fraudulent Transfer
2019.01.30 ... Resignation Of Corporate Officer Not A Fraudulent Transfer In Texas Opinion
Insider Preference Test
OTHER SOURCES OF FRAUDULENT TRANSFER LAW
Creditor Definition
Debtor Insider Affiliate Relative Organization Person Definitions
Claim And Debt Definitions
Asset And Property Definitions
Lien And Valid Lien Definitions
Value And Reasonably Equivalent Value (REV) Definition
Insolvency Definition
Statute Of Extinguishment a/k/a (incorrectly) Statute Of Limitations
Transferee Good Faith
Non-Money Remedy
Useful Articles and References
Jay Adkisson's Available Services
Voidable Transactions: Fraudulent Transfers In Modern American Law, by Jay D. Adkisson
© 2018 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 https://voidabletransactions.com Contact: jay [at] jayad.com or by phone to 702-953-9617 or by fax to 877-698-0678.