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Fraudulent conveyance4/27/2023 ![]() To reduce forum shopping, the new Act codifies a uniform choice of law rule based on the debtor’s location at the time of the transfer, determined by reference to its chief executive office. Currently, New York employs a common-law, multi-factor choice of law analysis for fraudulent conveyance claims. Codified bright-line choice of law rule. ![]() This change brings New York’s statute of limitations in line with most other states and eliminates what is sometimes an advantage for creditors. The UVTA eliminates New York’s uniquely long six-year statute of limitations for fraudulent conveyances and replaces it with a statute of repose expiring four years after the date of the challenged transaction or one year after the date of reasonable discovery, whichever is later. The UVTA will become effective in New York on April 4, 2020, and includes a number of substantive changes of interest to creditors. The UVTA was promulgated as the successor to the Uniform Fraudulent Transfers Act in place in most states (but not New York), and has so far been enacted in 20 other states. On December 6, 2019, Governor Cuomo signed into law an Act that entirely repeals New York’s existing fraudulent conveyance law which has been in place since 1925, and replaces it with the Uniform Law Commission’s Uniform Voidable Transactions Act (UVTA). (c) A creditor making a claim under paragraph (a) has the burden of proving the elements of the claim by a preponderance of the evidence.With little fanfare, New York has recently enacted a complete overhaul of its fraudulent conveyance law. (11) the debtor transferred the essential assets of the business to a lienor that transferred the assets to an insider of the debtor. ![]() (10) the transfer occurred shortly before or shortly after a substantial debt was incurred and (9) the debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred (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 (7) the debtor removed or concealed assets (5) the transfer was of substantially all the debtor's assets ![]() (4) before the transfer was made or obligation was incurred, the debtor had been sued or threatened with suit (3) the transfer or obligation was disclosed or concealed (2) the debtor retained possession or control of the property transferred after the transfer (1) the transfer or obligation was to an insider (b) In determining actual intent under paragraph (a), clause (1), consideration may be given, among other factors, to whether: (ii) 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. (i) 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 (2) without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor: (1) with actual intent to hinder, delay, or defraud any creditor of the debtor or (a) A transfer made or obligation incurred by a debtor is voidable 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: 513.44 TRANSFER OR OBLIGATION VOIDABLE AS TO PRESENT OR FUTURE CREDITOR.
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