![]() ![]() A debtor who transfers property without fair consideration is presumed to be insolvent.įair consideration is deemed to have been given when: (1) the transferee conveys property in exchange for the transfer, or the transfer discharges an antecedent debt (2) the property exchanged by the transferee is of “fair equivalent” value to the property transferred by the debtor and (3) the transferee makes the exchange in “good faith.” See In re Sharp Intern. This is a “balance sheet test.” See In re Gordon Car & Truck Rental, Inc., 59 B.R. “A person is insolvent when the present fair salable value of his assets is less than the amount that will be required to pay his probable liability on his existing debts as they become absolute and matured.” DCL § 271(1). To establish a fraudulent conveyance under Section 273, the creditor must establish that: (1) the debtor made a conveyance (2) the debtor was insolvent prior to the conveyance or rendered insolvent thereby and (3) the conveyance was made without fair consideration. Very conveyance made … by a person who is or will be thereby rendered insolvent is fraudulent as to creditors without regard to actual intent if the conveyance is made … without a fair consideration. A conclusory allegation that the plaintiff has been defrauded is not sufficient. 1965) (“Inadequacy of consideration, secret or hurried transactions not in the usual mode of doing business, and the use of dummies or fictitious parties are common examples of ‘badges of fraud.’”). 1979) (inference raised from the relationship of the parties to the transaction and the secrecy of the sale) Gafco, Inc. “Among such circumstances are: a close relationship between the parties to the alleged fraudulent transaction a questionable transfer not in the usual course of business inadequacy of the consideration the transferor’s knowledge of the creditor’s claim and the inability to pay it and retention of control of the property by the transferor after the conveyance.” Id. 1999) (internal quotation marks and citations omitted). Consequently, courts allow creditors “to rely on badges of fraud to support his case, i.e., circumstances so commonly associated with fraudulent transfers that their presence gives rise to an inference of intent.” Wall St. Since it is rarely susceptible to direct proof, actual intent is typically established through circumstantial evidence surrounding the allegedly fraudulent act. “Actual intent” to defraud must be proven by clear and convincing evidence. The burden of proving actual intent is on the party seeking to set aside the conveyance. In general, a party pleading a cause of action for fraudulent conveyance must allege specific facts, including, among other things, the identity of the specific transactions or conveyances that the plaintiff alleges were fraudulent. Very conveyance made … with actual intent … to hinder, delay, or defraud either present or future creditors, is fraudulent.… Whether the debtor transfers assets with intent to defraud or without fair consideration, the DCL provides creditors with a number of remedies. New York creditors often look to the Debtor and Creditor Law (the “DCL”), as well as the common law, to recover assets that have been (or may be) transferred by debtors to another party. Anti-Retaliation Under The SEC And CFTC Whistleblower Programsįraudulent Conveyance Claims Dismissed For Failure to Plead Fraud With Particularity Print Article.The Confidentiality Protections Under The SEC/CFTC Whistleblower Program.The Whistleblower’s Information Must Lead To a Successful Enforcement Action.The Whistleblower Must Voluntarily Provide Original Information.The Process of Submitting A Whistleblower Claim.Eligibility Under The IRS Whistleblower Program. ![]() The Anti-Retaliation Provisions Of The False Claims Act.What to Expect When Blowing The Whistle. ![]()
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