2023 Hawaii Revised Statutes › Title 36. Civil Remedies and Defenses and Special Proceedings › 651C. Uniform Fraudulent Transfer Act › 651C-4 Transfers fraudulent as to present and future creditors.

§651C-4 Transfers fraudulent as to present and future creditors.
(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 the debtor would incur, debts beyond the debtor's ability to pay as they became due.
(b) In determining actual intent under subsection (a)(1), consideration may be given, among other factors, to whether:
(1) The transfer or obligation was to an insider;
(2) The debtor had 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 was sued or threatened with suit;
(5) The transfer was of substantially all the debtor's assets;
(6) The debtor had absconded;
(7) The debtor had 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 had occurred shortly before or shortly after a substantial debt was incurred; and
(11) The debtor had transferred the essential assets of the business to a lienor who had transferred the assets to an insider of the debtor. [L 1985, c 216, pt of §1]
Case Notes
Fraudulent transfers, discussed. 916 F.2d 528 (1990).
Plaintiffs pled facts with sufficient particularity to support a cause of action for fraudulent conveyance under subsection (a)(1) and (a)(2)(B) and §651C-5(a). 529 F. Supp. 2d 1190 (2007).
Although Hawaii's uniform fraudulent transfer act does not preclude preferential transfers per se, if the preferential transfer was made with "actual intent to hinder, delay, or defraud any creditor" the transfer will be deemed fraudulent. 113 H. 174, 150 P.3d 823 (2006).
Ample, clear, and convincing evidence of transferor's actual intent to hinder, delay, or defraud creditors existed where: (1) transfers of funds were made to or for the benefit of insiders who were not creditors of transferor; (2) the transfers were made while litigation against judgment creditors over the transferred funds was pending; (3) prior to the litigation being completed, transferor "upstreamed" nearly all of its assets to or for the benefit of transferor's insider investor, leaving transferor unable to pay judgment creditors; (4) transferor received no consideration of reasonably equivalent value for the transfers; (5) the transfers occurred immediately after transferor's substantial indebtedness to judgment creditors was incurred; and (6) the transfers were made while transferor was winding up its business, thus leaving no foreseeable source to pay judgment creditors. 136 H. 158 (App.), 358 P.3d 727 (2015).
Mentioned: 130 H. 58 (App.), 305 P.3d 474 (2013).