Remedies
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WHAT ARE THE CREDITORS REMEDIES?
The last consideration in an UVTA analysis is the remedy to be employed by the Creditor to either avoid the transfer and enforce the judgment directly against the asset under §7, or to obtain a money judgment against the Transferee under §8(b) and (c).
Historically, avoidance of the transaction has long been the primary remedy available to creditors bringing fraudulent transfer actions, although the Uniform Fraudulent Conveyances Act of 1918 also allowed the Creditor to restrain the Transferee from further transferring the property away, and for the appointment of a Receiver to take charge of the property. The UFCA did not, however, specifically allow a court to award money damages against a Transferee for the value of the asset.
When the Uniform Fraudulent Transfers Act was adopted by the ULC in 1986, provisions were included in §§ 8(a) and (b) to expressly allow the Creditor to collect a money judgment against the Transferee for the value of the asset that had been transferred. These provisions tracked somewhat the 1978 and 1986 amendments to the Bankruptcy Code which authorized the Trustee to obtain the value of the property from the Transferee. But whereas Bankruptcy Code § 550 leaves to the discretion of the court whether value is awardable in lieu of avoidance of the transfer, UVTA §§ 8(a) and (b) effectively allows the Creditor to elect which remedy is sought.
But avoidance, and not a money judgment, is still the most popular relief sought by creditors. The basic idea is that title to the asset is returned to the Debtor, so that the Creditor may then enforce the judgment through ordinary means against the asset. In post-judgment litigation, these two steps are apt to occur simultaneously, i.e., the Court rules that the transfer has been avoided, and then requires the asset to be turned over either to the Creditor directly, or to the "levying officer" (read: Sheriff) to hold a judicial sale.
Creditors will sometimes seek to have a Receiver appointed by the Court to take charge of the asset. This is usually a strategic play, with the idea being that the Creditor can have the Receiver appointed for this limited purpose ("get his foot in the door"), and then the Receiver's powers can thereafter be expanded to encompass the totality of the Debtor's estate.
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