Voidable Transactions Article by Jay Adkisson for 2022
Article 2022 Articles2022
Why The Political Campaigns That Received FTX Donations Will Have To Pay Those Funds Back To FTX
Discusses the fraudulent transfer implications of FTX's political donations.
Understanding Overextending Insolvency And Sinking Insolvency: The UVTA's Two Strangest Tests
Discusses the two strange tests for a fraudulent transfer, which are found in Uniform Voidable Transactions Act (UVTA) at § 4(a)(2)(i) and (ii).
Understanding The Limits Of The Transferee's Good Faith Defense In Voidable Transaction Law
♦ This is an explanation of the transferee's good faith defense under the Uniform Voidable Transactions Act (UVTA). Here's a breakdown of the key points and some additional insights: (1) Key Points: Limited Application: The transferee's good faith defense under UVTA § 8(a) applies exclusively to the Intent Test of § 4(a)(1), also known as "actual fraudulent transfer." It does not apply to the other four tests for voidable transactions under the UVTA. Two Elements: The defense requires the transferee to prove both: Good Faith: The transferee acted honestly and without knowledge of any fraudulent intent by the debtor. Reasonably Equivalent Value (REV): The transferee gave value that is reasonably equivalent to what they received in the transaction. Redundancy with § 8(d): The § 8(a) defense is largely redundant with the good faith defense found in § 8(d), which provides protection for good faith transferees even if they didn't give 100% REV. Complexity: The UVTA's scheme for providing defenses is complex and arguably unnecessarily so. This complexity stems from the historical evolution of the law and the need to balance competing interests. (2) Additional Insights: Purpose of the Defense: The transferee's good faith defense is intended to protect innocent parties who engage in transactions with debtors without knowledge of any fraudulent intent. It prevents the law from unfairly penalizing those who acted in good faith. Burden of Proof: The burden of proving the elements of the defense rests on the transferee. Practical Implications: The limited application of the defense can be confusing and lead to litigation. Attorneys and judges need to carefully analyze the specific facts of each case to determine whether the defense applies. Future Revisions: The author suggests that a Revised UVTA (RUVTA) could address the complexity and redundancy of the current scheme. ♦