2023 Illinois Compiled Statutes › Chapter 740 - CIVIL LIABILITIES › 740 ILCS 160/ - Uniform Fraudulent Transfer Act.

(740 ILCS 160/1) (from Ch. 59, par. 101)
Sec. 1. 
		
		This Act shall be known and may be cited as the Uniform Fraudulent Transfer Act.
(Source: P.A. 86-814.)
(740 ILCS 160/2) (from Ch. 59, par. 102)
Sec. 2. 
		As used in this Act:
(a) "Affiliate" means:
(1) a person who directly or indirectly owns,     controls, or holds with power to vote, 20% or more of the outstanding voting securities of the debtor, other than a person who holds the securities,
(A) as a fiduciary or agent without sole         discretionary power to vote the securities; or
(B) solely to secure a debt, if the person has         not exercised the power to vote;
(2) a corporation with 20% or more outstanding voting     securities which are directly or indirectly owned, controlled, or held with power to vote, by the debtor or a person who directly or indirectly owns, controls, or holds with power to vote, 20% or more of the outstanding voting securities of the debtor, other than a person who holds the securities,
(A) as a fiduciary or agent without sole power to         vote the securities; or
(B) solely to secure a debt, if the person has         not in fact exercised the power to vote;
(3) a person whose business is operated by the         debtor under a lease or other agreement, or a person substantially all of whose assets are controlled by the debtor; or
(4) a person who operates the debtor's business under     a lease or other agreement or controls substantially all of the debtor's assets.
(b) "Asset" means property of a debtor, but the term does not include:
(1) property to the extent it is encumbered by a     valid lien;
(2) property to the extent it is generally exempt     under laws of this State; or
(3) an interest in property held in tenancy by the     entireties to the extent it is not subject to process by a creditor holding a claim against only one tenant.
(c) "Claim" means a right to payment, whether or not the right is reduced
to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured, or unsecured.
(d) "Creditor" means a person
who has a claim, including a claim for past-due child support.
(e) "Debt" means liability on a claim.
(f) "Debtor" means a person who is liable on a claim.
(g) "Insider" includes:
(1) if the debtor is an individual,
(A) a relative of the debtor or of a general         partner of the debtor;
(B) a partnership in which the debtor is a         general partner;
(C) a general partner in a partnership described         in clause (B); or
(D) a corporation of which the debtor is a         director, officer, or person in control;
(2) if the debtor is a corporation,
(A) a director of the debtor;
(B) an officer of the debtor;
(C) a person in control of the debtor;
(D) a partnership in which the debtor is a         general partner;
(E) a general partner in a partnership described         in clause (D); or
(F) a relative of a general partner, director,         officer, or person in control of the debtor;
(3) if the debtor is a partnership,
(A) a general partner in the debtor;
(B) a relative of a general partner in, a general         partner of, or a person in control of the debtor;
(C) another partnership in which the debtor is a         general partner;
(D) a general partner in a partnership described         in clause (C); or
(E) a person in control of the debtor;
(4) an affiliate, or an insider of an affiliate as if     the affiliate were the debtor; and
(5) a managing agent of the debtor.
(h) "Lien" means a charge against or an interest in property to secure
payment of a debt or performance of an obligation, and includes a security
interest created by agreement, a judicial lien obtained by legal or equitable
process or proceedings, a common-law lien, or a statutory lien.
(i) "Person" means an individual, partnership, corporation, association,
organization, government or governmental subdivision or agency, business
trust, estate, trust, or any other legal or commercial entity.
(j) "Property" means anything that may be the subject of ownership.
(k) "Relative" means an individual related by consanguinity within the
third degree as determined by the common law, a spouse, or an individual
related to a spouse within the third degree as so determined, and includes
an individual in an adoptive relationship within the third degree.
(l) "Transfer" means every mode, direct or indirect, absolute or
conditional,
voluntary or involuntary, of disposing of or parting with an asset or an
interest in an asset, and includes payment of money, release, lease, and
creation of a lien or other encumbrance.
(m) "Valid lien" means a lien that is effective against the holder of
a judicial lien subsequently obtained by legal or equitable process or
proceedings.
(Source: P.A. 90-18, eff. 7-1-97.)
(740 ILCS 160/3) (from Ch. 59, par. 103)
Sec. 3. 
		
		(a) A debtor is insolvent if the sum of the debtor's debts
is greater than all of the debtor's assets at a fair valuation.
(b) A debtor who is generally not paying his debts as they become due
is presumed to be insolvent.
(c) A partnership is insolvent under subsection (a) if the sum of the
partnership's debts is greater than the aggregate, at a fair valuation,
of all of the partnership's assets and the sum of the excess of the value
of each general partner's nonpartnership assets over the partner's nonpartnership debts.
(d) Assets under this Section do not include property that has been transferred,
concealed, or removed with intent to hinder, delay, or defraud creditors
or that has been transferred in a manner making the transfer voidable under this Act.
(e) Debts under this Section do not include an obligation to the extent
it is secured by a valid lien on property of the debtor not included as an asset.
(Source: P.A. 86-814.)
(740 ILCS 160/4) (from Ch. 59, par. 104)
Sec. 4. 
		
		(a) Value is given for a transfer or an obligation if, in exchange
for the transfer or obligation, property is transferred or an antecedent
debt is secured or satisfied, but value does not include an unperformed
promise made otherwise than in the ordinary course of the promisor's business
to furnish support to the debtor or another person.
(b) For the purposes of paragraph (2) of subsection (a) of Section 5 and
Section 6, a person
gives a reasonably
equivalent value if the person acquires an interest of the debtor in an
asset pursuant to a regularly conducted, noncollusive foreclosure sale or
execution of a power of sale for the acquisition or disposition of the interest
of the debtor upon default under a mortgage, deed of trust, or security
agreement.
(c) A transfer is made for present value if the exchange between the debtor
and the transferee is intended by them to be contemporaneous and is in fact
substantially contemporaneous.
(Source: P.A. 86-814.)
(740 ILCS 160/5) (from Ch. 59, par. 105)
Sec. 5. 
		
		(a) A transfer made or obligation incurred by a debtor is
fraudulent as to a creditor, whether the creditor's claim arose before or
after the transfer was made or the obligation was incurred, if the debtor
made the transfer or incurred the obligation:
(1) with actual intent to hinder, delay, or defraud any creditor of the debtor; or
(2) without receiving a reasonably equivalent value in exchange for the
transfer or obligation, and the debtor:
(A) was engaged or was about to engage in a business or a transaction
for which the remaining assets of the debtor were unreasonably small in
relation to the business or transaction; or
(B) intended to incur, or believed or reasonably should have believed
that he would incur, debts beyond his ability to pay as they became due.
(b) In determining actual intent under paragraph (1) of subsection (a), consideration
may be given, among other factors, to whether:
(1) the transfer or obligation was to an insider;
(2) the debtor retained possession or control of the property
transferred after the transfer;
(3) the transfer or obligation was disclosed or concealed;
(4) before the transfer was made or obligation was incurred, the debtor
had been sued or threatened with suit;
(5) the transfer was of substantially all the debtor's assets;
(6) the debtor absconded;
(7) the debtor removed or concealed assets;
(8) the value of the consideration received by the debtor was reasonably
equivalent to the value of the asset transferred or the amount of the obligation incurred;
(9) the debtor was insolvent or became insolvent shortly after the
transfer was made or the obligation was incurred;
(10) the transfer occurred shortly before or shortly after a substantial
debt was incurred; and
(11) the debtor transferred the essential assets of the business to a
lienor who transferred the assets to an insider of the debtor.
(Source: P.A. 86-814.)
(740 ILCS 160/6) (from Ch. 59, par. 106)
Sec. 6. 
		
		(a) A transfer made or obligation incurred by a debtor is
fraudulent as to a creditor whose claim arose before the transfer was made
or the obligation was incurred if the debtor made the transfer or incurred
the obligation without receiving a reasonably equivalent value in exchange
for the transfer or obligation and the debtor was insolvent at that time or
the debtor became insolvent as a result of the transfer or obligation.
(b) A transfer made by a debtor is fraudulent as to a creditor whose
claim arose before the transfer was made if the transfer was made to an
insider for an antecedent debt, the debtor was insolvent at that time, and
the insider had reasonable cause to believe that the debtor was insolvent.
(Source: P.A. 86-814.)
(740 ILCS 160/7) (from Ch. 59, par. 107)
Sec. 7. 
		For the purposes of this Act:
(a) a transfer is made:
(1) with respect to an asset that is real property other than a fixture,
but including the interest of a seller or purchaser under a contract for
the sale of the asset, when the transfer is so far perfected that a
good-faith purchaser of the asset from the debtor against whom applicable
law permits the transfer to be perfected cannot acquire an interest in the
asset that is superior to the interest of the transferee; and
(2) with respect to an asset that is not real property or that is a
fixture, when the transfer is so far perfected that a creditor on a simple
contract cannot acquire a judicial lien otherwise than under this Act that
is superior to the interest of the transferee;
(b) if applicable law permits the transfer to be perfected as provided
in subsection (a) and the transfer is not so perfected before the
commencement of an action for relief under this Act, the transfer is deemed
made immediately before the commencement of the action;
(c) if applicable law does not permit the transfer to be perfected as
provided in subsection (a), the transfer is made when it becomes effective
between the debtor and the transferee;
(d) a transfer is not made until the debtor has acquired rights in the
asset transferred;
(e) an obligation is incurred:
(1) if oral, when it becomes effective between the parties; or
(2) if evidenced by a writing, when the writing executed by the obligor
is delivered to or for the benefit of the obligee.
(Source: P.A. 86-814.)
(740 ILCS 160/8) (from Ch. 59, par. 108)
Sec. 8. 
		
		(a) In an action for relief against a transfer or obligation
under this Act, a creditor, subject to the limitations in Section 9, may obtain:
(1) avoidance of the transfer or obligation to the extent necessary to
satisfy the creditor's claim;
(2) an attachment or other provisional remedy against the asset
transferred or other property of the transferee in accordance with the
procedure prescribed by the Code of Civil Procedure;
(3) subject to applicable principles of equity and in accordance with
applicable rules of civil procedure,
(A) an injunction against further disposition by the debtor or a
transferee, or both, of the asset transferred or of other property;
(B) appointment of a receiver to take charge of the asset transferred
or of other property of the transferee; or
(C) any other relief the circumstances may require.
(b) If a creditor has obtained a judgment on a claim against the debtor,
the creditor, if the court so orders, may levy execution on the asset
transferred or its proceeds.
(Source: P.A. 86-814.)
(740 ILCS 160/9) (from Ch. 59, par. 109)
Sec. 9. 
		
		(a) A transfer or obligation is not voidable under paragraph
(1) of subsection (a) of Section
5 against a person who took in good faith and for a reasonably
equivalent value or against any subsequent transferee or obligee.
(b) Except as otherwise provided in this Section, to the extent a
transfer is voidable in an action by a creditor under paragraph (1) of
subsection (a) of Section 8, the
creditor may recover judgement for the value of the asset transferred, as
adjusted under subsection (c), 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) any subsequent transferee other than a good-faith transferee who
took for value or from any subsequent transferee.
(c) If the judgment under subsection (b) is based upon the value of the
asset transferred, the judgment must 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.
(d) Notwithstanding voidability of a transfer or an obligation under
this Act, a good-faith transferee or obligee is entitled, to the extent of
the value given the debtor for the transfer or obligation, to
(1) a lien on or a right to retain any interest in the asset transferred;
(2) enforcement of any obligation incurred; or
(3) a reduction in the amount of the liability on the judgment.
(e) A transfer is not voidable under paragraph (2) of subsection (a) of
Section 5 or Section 6 if the
transfer results from:
(1) termination of a lease upon default by the debtor when the
termination is pursuant to the lease and applicable law; or
(2) enforcement of a security interest in compliance with Article 9 of
the Uniform Commercial Code.
(f) A transfer is not voidable under subsection (b) of Section 6:
(1) to the extent the insider gave new value to or for the benefit of the
debtor after the transfer was made unless the new value was secured by a valid
lien;
(2) if made in the ordinary course of business or financial affairs of
the debtor and the insider; or
(3) 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.
(Source: P.A. 86-814.)
(740 ILCS 160/10) (from Ch. 59, par. 110)
Sec. 10. 
		
		A cause of action with respect to a fraudulent transfer or
obligation under this Act is extinguished unless action is brought:
(a) under paragraph (1) of subsection (a) of Section 5, within 4 years
after the transfer was made or
the obligation was incurred or, if later, within one year after the
transfer or obligation was or could reasonably have been discovered by the
claimant;
(b) under paragraph (2) of subsection (a) of Section 5 or subsection (a) of
Section 6, within 4 years after the transfer was
made or the obligation was incurred; or
(c) under subsection (b) of Section 6, within one year after the transfer
was made or
the obligation was incurred.
(Source: P.A. 86-814.)
(740 ILCS 160/11) (from Ch. 59, par. 111)
Sec. 11. 
		
		Unless displaced by the provisions of this Act, the
principles of law and equity, including the law merchant and the law
relating to principal and agent, estoppel, laches, fraud,
misrepresentation, duress, coercion, mistake, insolvency, or other
validating or invalidating cause, supplement its provisions.
(Source: P.A. 86-814.)
(740 ILCS 160/12) (from Ch. 59, par. 112)
Sec. 12. 
		
		This Act shall be applied and construed to effectuate its
general purpose to make uniform the law with respect to the subject of this
Act among states enacting it.
(Source: P.A. 86-814.)