Opinion ID: 1870025
Heading Depth: 1
Heading Rank: 8

Heading: Transfers for Value

Text: [8] ETSI and the Abbotts first claim that the transfer merely involved bookkeeping entries and that nothing of value was actually exchanged. [7] Section 36-702(12) defines a transfer as 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. Section 36-704(a) states that 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. Although the Abbotts claim that no value was exchanged, the record contradicts that assertion. ATI's 2004 federal tax return lists the debt due from API as an other current asset at the beginning of the year, but not at the end of the year after the December 2004 transfer took place. Furthermore, the Abbotts issued a new promissory note after the December 2004 transfer. The first promissory note, dated August 20, 2004, stated that the amount due from ATI to the Abbotts was $647,071.61. The Abbotts then reissued the promissory note for $544,538.32, after the December 2004 transfer. The UFTA clearly states that value is exchanged when the transfer is made to satisfy an antecedent debt. The first promissory note establishes that there was an antecedent debt; the second demonstrates that the December 2004 transfer was made to secure part of that debt. Therefore, value was exchanged, and a transfer was made.