Opinion ID: 200761
Heading Depth: 2
Heading Rank: 2

Heading: Counts II-IV.

Text: 13 Counts II through IV of Federal's complaint alleged that the purpose and effect of the creation and funding of the partnerships was to dilute the value of Romano's stock. On this basis, Federal sought to collapse the limited partnerships. In mounting this attack, it relied upon both UFCA § 4, quoted supra, and UFCA § 7. The latter provision is an actual fraud provision. Throughout the relevant time frame, it read: Every conveyance made and every obligation incurred with actual intent, as distinguished from intent presumed in law, to hinder, delay or defraud either present or future creditors, is fraudulent as to both present and future creditors. 14 Mass. Gen. Laws ch. 109A, § 7 (repealed 1996). 15 The district court ruled against Federal on these counts. It rejected Federal's constructive fraud claim, finding that the corporations were the actual transferors and that they were not insolvent at the times of the transfers. The court likewise rejected the claim of actual fraud, crediting evidence that there was a legitimate business purpose behind the creation and funding of the limited partnerships, namely, that the restructuring was a prerequisite to obtaining needed financing from the United States Department of Housing and Urban Development (HUD).