Assembly Actions -
Lowercase Senate Actions - UPPERCASE |
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Dec 06, 2019 |
signed chap.580 |
Nov 26, 2019 |
delivered to governor |
May 08, 2019 |
returned to assembly passed senate 3rd reading cal.495 substituted for s4236 |
May 08, 2019 |
substituted by a5622 |
May 06, 2019 |
advanced to third reading |
May 01, 2019 |
2nd report cal. |
Apr 30, 2019 |
1st report cal.495 |
Mar 05, 2019 |
referred to judiciary |
Senate Bill S4236
Signed By Governor2019-2020 Legislative Session
Relates to enacting the uniform voidable transactions act; repealer
download bill text pdfSponsored By
(D, WF) 47th Senate District
Archive: Last Bill Status Via A5622 - Signed by Governor
- Introduced
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- In Committee Assembly
- In Committee Senate
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- On Floor Calendar Assembly
- On Floor Calendar Senate
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- Passed Assembly
- Passed Senate
- Delivered to Governor
- Signed By Governor
Actions
Votes
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Floor Vote: May 8, 2019
aye (60)- Addabbo Jr.
- Akshar
- Amedore
- Antonacci
- Bailey
- Benjamin
- Biaggi
- Boyle
- Breslin
- Brooks
- Carlucci
- Comrie
- Felder
- Flanagan
- Gallivan
- Gaughran
- Gianaris
- Gounardes
- Griffo
- Harckham
- Hoylman-Sigal
- Jackson
- Jacobs
- Jordan
- Kaminsky
- Kaplan
- Kavanagh
- Kennedy
- Krueger
- LaValle
- Lanza
- Little
- Liu
- Martinez
- May
- Mayer
- Metzger
- Montgomery
- Myrie
- O'Mara
- Ortt
- Parker
- Persaud
- Ramos
- Ranzenhofer
- Ritchie
- Rivera
- Robach
- Salazar
- Sanders Jr.
- Savino
- Sepúlveda
- Serino
- Serrano
- Seward
- Skoufis
- Stavisky
- Stewart-Cousins
- Tedisco
- Thomas
nay (1)excused (1)
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2019-S4236 (ACTIVE) - Details
2019-S4236 (ACTIVE) - Sponsor Memo
BILL NUMBER: S4236 SPONSOR: HOYLMAN TITLE OF BILL: An act to amend the debtor and creditor law, the civil practice law and rules, the estates, powers and trusts law and the work- ers' compensation law, in relation to enacting the "uniform voidable transactions act"; and to repeal certain provisions of the debtor and creditor law relating to fraudulent conveyances PURPOSE OF BILL: This bill would update the Debtor and Creditor Law by replacing the 1925 Fraudulent Conveyances Act with the Uniform Voidable Transactions Act. This new law will make the system more efficient and cost effective, and ensure greater consistency with federal bankruptcy law. SUMMARY OF PROVISIONS OF BILL: Section one of the bill provides that this act shall be known and may be cited as the "Uniform Voidable Transactions Act."
Section two of the bill repeals Article 10 of the Debtor and Creditor law ("Fraudulent Conveyances") and enacts a new Article 10 ("Uniform Voidable Transactions Act"), which contains the following pieces: Section 270 Definitions Section 271 Insolvency Section 272 Value Section 273 Transfer or obligation voidable as to present or future creditor- Section 274 Transfer or obligation voidable as to present creditor Section 275 When transfer is made or obligation is incurred Section 276 Remedies of creditor Section 276-a - Attorneys fees in action or special proceeding to avoid a transfer or obligation Section 277 Defenses, liability, and protection of transferee or obligee Section 278 Extinguishment of claim for relief Section 279 Governing Law Section 280 Supplementary provisions Section 281 Uniformity of application and construction Section 281-a Relation to electronic signatures in global and national commerce act Section three of the bill amends Section 5205(c)(5) of the CPLR to update a reference to "fraudulent conveyances" so that it now refers to "voidable transactions." Section four of the bill amends Section 5519(g) of the CPLR to update a reference to "fraudulent conveyances" so that it now refers to "voidable transactions." Section five of the bill amends Section 7-3.1(b)(4) of the EPTL to update a reference to "fraudulent conveyances" so that it now refers to "voidable transactions." Section six of the bill updates a cross-reference to Section 273 of the Debtor and Creditor Law so that it properly references the updated Section 274(a) of the Debtor and Creditor Law. JUSTIFICATION: This bill would enact a needed update to New York's Debtor and Creditor Law. New York's current Fraudulent Conveyances Act (Article 10) was enacted in 1925, based on a proposal developed by the Uniform Law Commissioners in 1918. After enactment of the federal Bankruptcy Reform Act of 1978, the Uniform Law Commissioners revisited this issue and in 1984 they submit- ted an updated version entitled the Uniform Fraudulent Transfer Act. While that legislation was adopted by almost every state, it was never enacted in New York. Today, only New York and Maryland continue to oper- ate under a 1920s-era law. There have been several major developments since the enactment of New York's current law in 1925, including the enactment of the federal bank- ruptcy laws and the enactment of a Uniform Commercial Code. New York's law is now inconsistent in many ways with federal bankruptcy laws and the laws in most parts of the country. This inconsistency, and the application of a number of outdated provisions, have added costs and complexity to the process, to the detriment of creditors, debtors and recipients of transfers alike. In addition, it has become increasingly noted that New York's outdated law can have unintended consequences. For example, although certain property is deemed by law to be exempt from creditors, there have been cases in which the transfer of such exempt assets may be subject to New York's existing fraudulent conveyances act, thereby allowing creditors to seize assets that would otherwise be exempt. This bill would adopt the Uniform Law Commission's 2014 revised version of the Uniform Fraudulent Transfer Act, now known as the Uniform Voida- ble Transfers Act. The 2014 revisions made a number of improvements to the 1984 version, including changing and clarifying terminology (such as referring to "voidable transfers" instead of the potentially misleading phrase "fraudulent transfers"); clarifying the choice-of-law determi- nation; improving provisions for determining insolvency; and clarifying the burden of proof of each party. This new act maintains the basic principles of New York's longstanding law, but makes the law more consistent, predictable, efficient and cost effective. LEGISLATIVE HISTORY: 2018: S.6180-A - Died in Judiciary 2017: S.6180-A - Died on Third Reading (Committed to Rules) FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: None. EFFECTIVE DATE: This act shall take effect 120 days after it shall have become law, and shall apply to a transfer made or obligation incurred on or after such effective date, but shall not apply to a transfer made or obligation incurred before such effective date, nor shall it apply to a right of action that has accrued before such effective date. For the foregoing purposes, a transfer is made and an obligation is incurred at the time provided in Section 275 of the Debtor and Creditor Law as added by Section 2 of this Act.
2019-S4236 (ACTIVE) - Bill Text download pdf
S T A T E O F N E W Y O R K ________________________________________________________________________ 4236 2019-2020 Regular Sessions I N S E N A T E March 5, 2019 ___________ Introduced by Sen. HOYLMAN -- read twice and ordered printed, and when printed to be committed to the Committee on Judiciary AN ACT to amend the debtor and creditor law, the civil practice law and rules, the estates, powers and trusts law and the workers' compen- sation law, in relation to enacting the "uniform voidable transactions act"; and to repeal certain provisions of the debtor and creditor law relating to fraudulent conveyances THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Short title. This act shall be known and may be cited as the "uniform voidable transactions act". § 2. Article 10 of the debtor and creditor law is REPEALED and a new article 10 is added to read as follows: ARTICLE 10 UNIFORM VOIDABLE TRANSACTIONS ACT SECTION 270. DEFINITIONS. 271. INSOLVENCY. 272. VALUE. 273. TRANSFER OR OBLIGATION VOIDABLE AS TO PRESENT OR FUTURE CREDITOR. 274. TRANSFER OR OBLIGATION VOIDABLE AS TO PRESENT CREDITOR. 275. WHEN TRANSFER IS MADE OR OBLIGATION IS INCURRED. 276. REMEDIES OF CREDITOR. 276-A. ATTORNEY'S FEES IN ACTION OR SPECIAL PROCEEDING UNDER THIS ARTICLE TO AVOID A TRANSFER OR OBLIGATION. 277. DEFENSES, LIABILITY, AND PROTECTION OF TRANSFEREE OR OBLIGEE. 278. EXTINGUISHMENT OF CLAIM FOR RELIEF. 279. GOVERNING LAW. 280. SUPPLEMENTARY PROVISIONS. 281. UNIFORMITY OF APPLICATION AND CONSTRUCTION. EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted.
LBD00878-01-9 S. 4236 2 281-A. RELATION TO ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT. § 270. DEFINITIONS. AS USED IN THIS ARTICLE: (A) "AFFILIATE" MEANS: (1) A PERSON THAT DIRECTLY OR INDIRECTLY OWNS, CONTROLS OR HOLDS WITH POWER TO VOTE, TWENTY PERCENT OR MORE OF THE OUTSTANDING VOTING SECURI- TIES OF THE DEBTOR, OTHER THAN A PERSON THAT HOLDS THE SECURITIES: (I) AS A FIDUCIARY OR AGENT WITHOUT SOLE DISCRETIONARY POWER TO VOTE THE SECURITIES; OR (II) SOLELY TO SECURE A DEBT, IF THE PERSON HAS NOT IN FACT EXERCISED THE POWER TO VOTE; (2) A CORPORATION TWENTY PERCENT OR MORE OF WHOSE OUTSTANDING VOTING SECURITIES ARE DIRECTLY OR INDIRECTLY OWNED, CONTROLLED OR HELD WITH POWER TO VOTE, BY THE DEBTOR OR A PERSON THAT DIRECTLY OR INDIRECTLY OWNS, CONTROLS OR HOLDS, WITH POWER TO VOTE, TWENTY PERCENT OR MORE OF THE OUTSTANDING VOTING SECURITIES OF THE DEBTOR, OTHER THAN A PERSON THAT HOLDS THE SECURITIES: (I) AS A FIDUCIARY OR AGENT WITHOUT SOLE DISCRETIONARY POWER TO VOTE THE SECURITIES; OR (II) SOLELY TO SECURE A DEBT, IF THE PERSON HAS NOT IN FACT EXERCISED THE POWER TO VOTE; (3) A PERSON WHOSE BUSINESS IS OPERATED BY THE DEBTOR UNDER A LEASE OR OTHER AGREEMENT, OR A PERSON SUBSTANTIALLY ALL OF WHOSE ASSETS ARE CONTROLLED BY THE DEBTOR; OR (4) A PERSON THAT OPERATES THE DEBTOR'S BUSINESS UNDER A LEASE OR OTHER AGREEMENT OR CONTROLS SUBSTANTIALLY ALL OF THE DEBTOR'S ASSETS. (B) "ASSET" MEANS PROPERTY OF A DEBTOR, BUT THE TERM DOES NOT INCLUDE: (1) PROPERTY TO THE EXTENT IT IS ENCUMBERED BY A VALID LIEN; (2) PROPERTY TO THE EXTENT IT IS GENERALLY EXEMPT UNDER NON-BANKRUPTCY LAW; OR (3) AN INTEREST IN PROPERTY HELD IN TENANCY BY THE ENTIRETY TO THE EXTENT IT IS NOT SUBJECT TO PROCESS BY A CREDITOR HOLDING A CLAIM AGAINST ONLY ONE TENANT. (C) "CLAIM", EXCEPT AS USED IN "CLAIM FOR RELIEF", MEANS A RIGHT TO PAYMENT, WHETHER OR NOT THE RIGHT IS REDUCED TO JUDGMENT, LIQUIDATED, UNLIQUIDATED, FIXED, CONTINGENT, MATURED, UNMATURED, DISPUTED, UNDIS- PUTED, LEGAL, EQUITABLE, SECURED OR UNSECURED. (D) "CREDITOR" MEANS A PERSON THAT HAS A CLAIM. (E) "DEBT" MEANS LIABILITY ON A CLAIM. (F) "DEBTOR" MEANS A PERSON THAT IS LIABLE ON A CLAIM. (G) "ELECTRONIC" MEANS RELATING TO TECHNOLOGY HAVING ELECTRICAL, DIGITAL, MAGNETIC, WIRELESS, OPTICAL, ELECTROMAGNETIC OR SIMILAR CAPA- BILITIES. (H) "INSIDER" INCLUDES: (1) IF THE DEBTOR IS AN INDIVIDUAL: (I) A RELATIVE OF THE DEBTOR OR OF A GENERAL PARTNER OF THE DEBTOR; (II) A PARTNERSHIP IN WHICH THE DEBTOR IS A GENERAL PARTNER; (III) A GENERAL PARTNER IN A PARTNERSHIP DESCRIBED IN SUBPARAGRAPH (II) OF THIS PARAGRAPH; OR (IV) A CORPORATION OF WHICH THE DEBTOR IS A DIRECTOR, OFFICER, OR PERSON IN CONTROL; (2) IF THE DEBTOR IS A CORPORATION: (I) A DIRECTOR OF THE DEBTOR; (II) AN OFFICER OF THE DEBTOR; (III) A PERSON IN CONTROL OF THE DEBTOR; (IV) A PARTNERSHIP IN WHICH THE DEBTOR IS A GENERAL PARTNER; S. 4236 3 (V) A GENERAL PARTNER IN A PARTNERSHIP DESCRIBED IN SUBPARAGRAPH (IV) OF THIS PARAGRAPH; OR (VI) A RELATIVE OF A GENERAL PARTNER, DIRECTOR, OFFICER OR PERSON IN CONTROL OF THE DEBTOR; (3) IF THE DEBTOR IS A PARTNERSHIP: (I) A GENERAL PARTNER IN THE DEBTOR; (II) A RELATIVE OF A GENERAL PARTNER IN, A GENERAL PARTNER OF OR A PERSON IN CONTROL OF THE DEBTOR; (III) ANOTHER PARTNERSHIP IN WHICH THE DEBTOR IS A GENERAL PARTNER; (IV) A GENERAL PARTNER IN A PARTNERSHIP DESCRIBED IN SUBPARAGRAPH (III) OF THIS PARAGRAPH; OR (V) A PERSON IN CONTROL OF THE DEBTOR; (4) AN AFFILIATE, OR AN INSIDER OF AN AFFILIATE AS IF THE AFFILIATE WERE THE DEBTOR; AND (5) A MANAGING AGENT OF THE DEBTOR. (I) "LIEN" MEANS A CHARGE AGAINST OR AN INTEREST IN PROPERTY TO SECURE PAYMENT OF A DEBT OR PERFORMANCE OF AN OBLIGATION, AND INCLUDES A SECU- RITY INTEREST CREATED BY AGREEMENT, A JUDICIAL LIEN OBTAINED BY LEGAL OR EQUITABLE PROCESS OR PROCEEDINGS, A COMMON-LAW LIEN, OR A STATUTORY LIEN. (J) "ORGANIZATION" MEANS A PERSON OTHER THAN AN INDIVIDUAL. (K) "PERSON" MEANS AN INDIVIDUAL, ESTATE, PARTNERSHIP, ASSOCIATION, TRUST, BUSINESS OR NONPROFIT ENTITY, PUBLIC CORPORATION, GOVERNMENT OR GOVERNMENTAL SUBDIVISION, AGENCY OR INSTRUMENTALITY, OR OTHER LEGAL OR COMMERCIAL ENTITY. (L) "PROPERTY" MEANS ANYTHING THAT MAY BE THE SUBJECT OF OWNERSHIP. (M) "RECORD" MEANS INFORMATION THAT IS INSCRIBED ON A TANGIBLE MEDIUM OR THAT IS STORED IN AN ELECTRONIC OR OTHER MEDIUM AND IS RETRIEVABLE IN PERCEIVABLE FORM. (N) "RELATIVE" MEANS AN INDIVIDUAL RELATED BY CONSANGUINITY WITHIN THE THIRD DEGREE AS DETERMINED BY THE COMMON LAW, A SPOUSE OR AN INDIVIDUAL RELATED TO A SPOUSE WITHIN THE THIRD DEGREE AS SO DETERMINED, AND INCLUDES AN INDIVIDUAL IN AN ADOPTIVE RELATIONSHIP WITHIN THE THIRD DEGREE. (O) "SIGN" MEANS, WITH PRESENT INTENT TO AUTHENTICATE OR ADOPT A RECORD: (I) TO EXECUTE OR ADOPT A TANGIBLE SYMBOL; OR (II) TO ATTACH TO OR LOGICALLY ASSOCIATE WITH THE RECORD AN ELECTRONIC SYMBOL, SOUND, OR PROCESS. (P) "TRANSFER" MEANS EVERY MODE, DIRECT OR INDIRECT, ABSOLUTE OR CONDITIONAL, VOLUNTARY OR INVOLUNTARY, OF DISPOSING OF OR PARTING WITH AN ASSET OR AN INTEREST IN AN ASSET, AND INCLUDES PAYMENT OF MONEY, RELEASE, LEASE, LICENSE, AND CREATION OF A LIEN OR OTHER ENCUMBRANCE. (Q) "VALID LIEN" MEANS A LIEN THAT IS EFFECTIVE AGAINST THE HOLDER OF A JUDICIAL LIEN SUBSEQUENTLY OBTAINED BY LEGAL OR EQUITABLE PROCESS OR PROCEEDINGS. § 271. INSOLVENCY. (A) A DEBTOR IS INSOLVENT IF, AT A FAIR VALUATION, THE SUM OF THE DEBTOR'S DEBTS IS GREATER THAN THE SUM OF THE DEBTOR'S ASSETS. (B) A DEBTOR THAT IS GENERALLY NOT PAYING THE DEBTOR'S DEBTS AS THEY BECOME DUE OTHER THAN AS A RESULT OF A BONA FIDE DISPUTE IS PRESUMED TO BE INSOLVENT. THE PRESUMPTION IMPOSES ON THE PARTY AGAINST WHICH THE PRESUMPTION IS DIRECTED THE BURDEN OF PROVING THAT THE NONEXISTENCE OF INSOLVENCY IS MORE PROBABLE THAN ITS EXISTENCE. (C) ASSETS UNDER THIS SECTION DO NOT INCLUDE PROPERTY THAT HAS BEEN TRANSFERRED, CONCEALED OR REMOVED WITH INTENT TO HINDER, DELAY OR S. 4236 4 DEFRAUD CREDITORS, OR THAT HAS BEEN TRANSFERRED IN A MANNER MAKING THE TRANSFER VOIDABLE UNDER THIS ARTICLE. (D) DEBTS UNDER THIS SECTION DO NOT INCLUDE AN OBLIGATION TO THE EXTENT IT IS SECURED BY A VALID LIEN ON PROPERTY OF THE DEBTOR NOT INCLUDED AS AN ASSET. § 272. VALUE. (A) VALUE IS GIVEN FOR A TRANSFER OR AN OBLIGATION IF, IN EXCHANGE FOR THE TRANSFER OR OBLIGATION, PROPERTY IS TRANSFERRED OR AN ANTECEDENT DEBT IS SECURED OR SATISFIED, BUT VALUE DOES NOT INCLUDE AN UNPERFORMED PROMISE MADE OTHERWISE THAN IN THE ORDINARY COURSE OF THE PROMISOR'S BUSINESS TO FURNISH SUPPORT TO THE DEBTOR OR ANOTHER PERSON. (B) FOR THE PURPOSES OF PARAGRAPH TWO OF SUBDIVISION (A) OF SECTION TWO HUNDRED SEVENTY-THREE AND SECTION TWO HUNDRED SEVENTY-FOUR OF THIS ARTICLE, A PERSON GIVES A REASONABLY EQUIVALENT VALUE IF THE PERSON ACQUIRES AN INTEREST OF THE DEBTOR IN AN ASSET PURSUANT TO A REGULARLY CONDUCTED, NONCOLLUSIVE FORECLOSURE SALE OR EXECUTION OF A POWER OF SALE FOR THE ACQUISITION OR DISPOSITION OF THE INTEREST OF THE DEBTOR UPON DEFAULT UNDER A MORTGAGE, DEED OF TRUST, OR SECURITY AGREEMENT. (C) A TRANSFER IS MADE FOR PRESENT VALUE IF THE EXCHANGE BETWEEN THE DEBTOR AND THE TRANSFEREE IS INTENDED BY THEM TO BE CONTEMPORANEOUS AND IS IN FACT SUBSTANTIALLY CONTEMPORANEOUS. § 273. TRANSFER OR OBLIGATION VOIDABLE AS TO PRESENT OR FUTURE CREDI- TOR. (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: (1) WITH ACTUAL INTENT TO HINDER, DELAY OR DEFRAUD ANY CREDITOR OF THE DEBTOR; OR (2) WITHOUT RECEIVING A REASONABLY EQUIVALENT VALUE IN EXCHANGE FOR THE TRANSFER OR OBLIGATION, AND THE DEBTOR: (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 (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. (B) IN DETERMINING ACTUAL INTENT UNDER PARAGRAPH ONE OF SUBDIVISION (A) OF THIS SECTION, CONSIDERATION MAY BE GIVEN, AMONG OTHER FACTORS, TO WHETHER: (1) THE TRANSFER OR OBLIGATION WAS TO AN INSIDER; (2) THE DEBTOR RETAINED POSSESSION OR CONTROL OF THE PROPERTY TRANS- FERRED AFTER THE TRANSFER; (3) THE TRANSFER OR OBLIGATION WAS DISCLOSED OR CONCEALED; (4) BEFORE THE TRANSFER WAS MADE OR OBLIGATION WAS INCURRED, THE DEBTOR HAD BEEN SUED OR THREATENED WITH SUIT; (5) THE TRANSFER WAS OF SUBSTANTIALLY ALL THE DEBTOR'S ASSETS; (6) THE DEBTOR ABSCONDED; (7) THE DEBTOR REMOVED OR CONCEALED ASSETS; (8) THE VALUE OF THE CONSIDERATION RECEIVED BY THE DEBTOR WAS REASON- ABLY EQUIVALENT TO THE VALUE OF THE ASSET TRANSFERRED OR THE AMOUNT OF THE OBLIGATION INCURRED; (9) THE DEBTOR WAS INSOLVENT OR BECAME INSOLVENT SHORTLY AFTER THE TRANSFER WAS MADE OR THE OBLIGATION WAS INCURRED; (10) THE TRANSFER OCCURRED SHORTLY BEFORE OR SHORTLY AFTER A SUBSTAN- TIAL DEBT WAS INCURRED; AND (11) THE DEBTOR TRANSFERRED THE ESSENTIAL ASSETS OF THE BUSINESS TO A LIENOR THAT TRANSFERRED THE ASSETS TO AN INSIDER OF THE DEBTOR. S. 4236 5 (C) A CREDITOR MAKING A CLAIM FOR RELIEF UNDER SUBDIVISION (A) OF THIS SECTION HAS THE BURDEN OF PROVING THE ELEMENTS OF THE CLAIM FOR RELIEF BY A PREPONDERANCE OF THE EVIDENCE. § 274. TRANSFER OR OBLIGATION VOIDABLE AS TO PRESENT CREDITOR. (A) A TRANSFER MADE OR OBLIGATION INCURRED BY A DEBTOR IS VOIDABLE AS TO A CREDITOR WHOSE CLAIM AROSE BEFORE THE TRANSFER WAS MADE OR THE OBLI- GATION WAS INCURRED IF THE DEBTOR MADE THE TRANSFER OR INCURRED THE OBLIGATION WITHOUT RECEIVING A REASONABLY EQUIVALENT VALUE IN EXCHANGE FOR THE TRANSFER OR OBLIGATION AND THE DEBTOR WAS INSOLVENT AT THAT TIME OR THE DEBTOR BECAME INSOLVENT AS A RESULT OF THE TRANSFER OR OBLI- GATION. (B) A TRANSFER MADE BY A DEBTOR IS VOIDABLE AS TO A CREDITOR WHOSE CLAIM AROSE BEFORE THE TRANSFER WAS MADE IF THE TRANSFER WAS MADE TO AN INSIDER FOR AN ANTECEDENT DEBT, THE DEBTOR WAS INSOLVENT AT THAT TIME, AND THE INSIDER HAD REASONABLE CAUSE TO BELIEVE THAT THE DEBTOR WAS INSOLVENT. (C) SUBJECT TO SUBDIVISION (B) OF SECTION TWO HUNDRED SEVENTY-ONE OF THIS ARTICLE, A CREDITOR MAKING A CLAIM FOR RELIEF UNDER SUBDIVISION (A) OR (B) OF THIS SECTION HAS THE BURDEN OF PROVING THE ELEMENTS OF THE CLAIM FOR RELIEF BY A PREPONDERANCE OF THE EVIDENCE. § 275. WHEN TRANSFER IS MADE OR OBLIGATION IS INCURRED. FOR THE PURPOSES OF THIS ARTICLE: (A) A TRANSFER IS MADE: (1) WITH RESPECT TO AN ASSET THAT IS REAL PROPERTY OTHER THAN A FIXTURE, BUT INCLUDING THE INTEREST OF A SELLER OR PURCHASER UNDER A CONTRACT FOR THE SALE OF THE ASSET, WHEN THE TRANSFER IS SO FAR PERFECTED THAT A GOOD-FAITH PURCHASER OF THE ASSET FROM THE DEBTOR AGAINST WHICH APPLICABLE LAW PERMITS THE TRANSFER TO BE PERFECTED CANNOT ACQUIRE AN INTEREST IN THE ASSET THAT IS SUPERIOR TO THE INTEREST OF THE TRANSFEREE; AND (2) WITH RESPECT TO AN ASSET THAT IS NOT REAL PROPERTY OR THAT IS A FIXTURE, WHEN THE TRANSFER IS SO FAR PERFECTED THAT A CREDITOR ON A SIMPLE CONTRACT CANNOT ACQUIRE A JUDICIAL LIEN OTHERWISE THAN UNDER THIS ARTICLE THAT IS SUPERIOR TO THE INTEREST OF THE TRANSFEREE; (B) IF APPLICABLE LAW PERMITS THE TRANSFER TO BE PERFECTED AS PROVIDED IN SUBDIVISION (A) OF THIS SECTION AND THE TRANSFER IS NOT SO PERFECTED BEFORE THE COMMENCEMENT OF AN ACTION FOR RELIEF UNDER THIS ARTICLE, THE TRANSFER IS DEEMED MADE IMMEDIATELY BEFORE THE COMMENCEMENT OF THE ACTION; (C) IF APPLICABLE LAW DOES NOT PERMIT THE TRANSFER TO BE PERFECTED AS PROVIDED IN SUBDIVISION (A) OF THIS SECTION, THE TRANSFER IS MADE WHEN IT BECOMES EFFECTIVE BETWEEN THE DEBTOR AND THE TRANSFEREE; (D) A TRANSFER IS NOT MADE UNTIL THE DEBTOR HAS ACQUIRED RIGHTS IN THE ASSET TRANSFERRED; AND (E) AN OBLIGATION IS INCURRED: (1) IF ORAL, WHEN IT BECOMES EFFECTIVE BETWEEN THE PARTIES; OR (2) IF EVIDENCED BY A RECORD, WHEN THE RECORD SIGNED BY THE OBLIGOR IS DELIVERED TO OR FOR THE BENEFIT OF THE OBLIGEE. § 276. REMEDIES OF CREDITOR. (A) IN AN ACTION FOR RELIEF AGAINST A TRANSFER OR OBLIGATION UNDER THIS ARTICLE, A CREDITOR, SUBJECT TO THE LIMITATIONS IN SECTION TWO HUNDRED SEVENTY-SEVEN OF THIS ARTICLE, MAY OBTAIN: (1) AVOIDANCE OF THE TRANSFER OR OBLIGATION TO THE EXTENT NECESSARY TO SATISFY THE CREDITOR'S CLAIM; S. 4236 6 (2) AN ATTACHMENT OR OTHER PROVISIONAL REMEDY AGAINST THE ASSET TRANS- FERRED OR OTHER PROPERTY OF THE TRANSFEREE IF AVAILABLE UNDER APPLICABLE LAW; AND (3) SUBJECT TO APPLICABLE PRINCIPLES OF EQUITY AND IN ACCORDANCE WITH APPLICABLE RULES OF CIVIL PROCEDURE: (I) AN INJUNCTION AGAINST FURTHER DISPOSITION BY THE DEBTOR OR A TRANSFEREE, OR BOTH, OF THE ASSET TRANSFERRED OR OF OTHER PROPERTY; (II) APPOINTMENT OF A RECEIVER TO TAKE CHARGE OF THE ASSET TRANSFERRED OR OF OTHER PROPERTY OF THE TRANSFEREE; OR (III) ANY OTHER RELIEF THE CIRCUMSTANCES MAY REQUIRE. (B) IF A CREDITOR HAS OBTAINED A JUDGMENT ON A CLAIM AGAINST THE DEBTOR, THE CREDITOR, IF THE COURT SO ORDERS, MAY LEVY EXECUTION ON THE ASSET TRANSFERRED OR ITS PROCEEDS. § 276-A. ATTORNEY'S FEES IN ACTION OR SPECIAL PROCEEDING UNDER THIS ARTICLE TO AVOID A TRANSFER OR OBLIGATION. IN AN ACTION OR SPECIAL PROCEEDING UNDER THIS ARTICLE IN WHICH A JUDGMENT CREDITOR WHO HAS BEEN AWARDED BY COURT ORDER OR AGREEMENT OR HAS WAIVED ATTORNEY'S FEES AVAIL- ABLE TO PREVAILING PARTIES BY THE TERMS OF THE STATUTE UNDER WHICH THE CREDITOR'S UNDERLYING CLAIM AROSE, OR REPRESENTATIVE ASSERTING THE RIGHTS OF SUCH JUDGMENT CREDITOR, RECOVERS JUDGMENT AVOIDING ANY TRANS- FER OR OBLIGATION, THE JUSTICE OR SURROGATE PRESIDING AT THE TRIAL SHALL FIX THE REASONABLE ATTORNEY'S FEES OF THE CREDITOR, OR CREDITOR REPRE- SENTATIVE, INCURRED IN SUCH ACTION OR SPECIAL PROCEEDING UNDER THIS ARTICLE AS AN ADDITIONAL AMOUNT REQUIRED TO SATISFY THE CREDITOR'S CLAIM, AND THE CREDITOR, OR CREDITOR REPRESENTATIVE, SHALL HAVE JUDGMENT THEREFOR AGAINST THE DEBTOR AND, SUBJECT TO THE DEFENSES AND PROTECTIONS IN SECTION TWO HUNDRED SEVENTY-SEVEN OF THIS ARTICLE, AGAINST ANY TRANS- FEREE (OR PERSON FOR WHOSE BENEFIT THE TRANSFER WAS MADE) AGAINST WHOM RELIEF IS ORDERED, IN ADDITION TO THE OTHER RELIEF GRANTED BY THE JUDG- MENT. THE FEE SO FIXED SHALL BE WITHOUT REGARD, OR PREJUDICE, TO ANY AGREEMENT, EXPRESS OR IMPLIED, BETWEEN THE CREDITOR, OR THE CREDITOR REPRESENTATIVE, AND HIS OR HER ATTORNEY WITH RESPECT TO THE COMPENSATION OF SUCH ATTORNEY. § 277. DEFENSES, LIABILITY, AND PROTECTION OF TRANSFEREE OR OBLIGEE. (A) A TRANSFER OR OBLIGATION IS NOT VOIDABLE UNDER PARAGRAPH ONE OF SUBDIVISION (A) OF SECTION TWO HUNDRED SEVENTY-THREE OF THIS ARTICLE AGAINST A PERSON THAT TOOK IN GOOD FAITH AND FOR A REASONABLY EQUIVALENT VALUE GIVEN THE DEBTOR OR AGAINST ANY SUBSEQUENT TRANSFEREE OR OBLIGEE. (B) TO THE EXTENT A TRANSFER IS AVOIDABLE IN AN ACTION BY A CREDITOR UNDER PARAGRAPH ONE OF SUBDIVISION (A) OF SECTION TWO HUNDRED SEVENTY- SIX OF THIS ARTICLE THE FOLLOWING RULES APPLY: (1) EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION, THE CREDITOR MAY RECOVER JUDGMENT FOR THE VALUE OF THE ASSET TRANSFERRED, AS ADJUSTED UNDER SUBDIVISION (C) OF THIS SECTION, OR THE AMOUNT NECESSARY TO SATIS- FY THE CREDITOR'S CLAIM, WHICHEVER IS LESS. THE JUDGMENT MAY BE ENTERED AGAINST: (I) THE FIRST TRANSFEREE OF THE ASSET OR THE PERSON FOR WHOSE BENEFIT THE TRANSFER WAS MADE; OR (II) AN IMMEDIATE OR MEDIATE TRANSFEREE OF THE FIRST TRANSFEREE, OTHER THAN: (A) A GOOD-FAITH TRANSFEREE THAT TOOK FOR VALUE; OR (B) AN IMMEDIATE OR MEDIATE GOOD-FAITH TRANSFEREE OF A PERSON DESCRIBED IN CLAUSE (A) OF THIS SUBPARAGRAPH. (2) RECOVERY PURSUANT TO PARAGRAPH ONE OF SUBDIVISION (A) OR SUBDIVI- SION (B) OF SECTION TWO HUNDRED SEVENTY-SIX OF THIS ARTICLE OF OR FROM THE ASSET TRANSFERRED OR ITS PROCEEDS, BY LEVY OR OTHERWISE, IS AVAIL- S. 4236 7 ABLE ONLY AGAINST A PERSON DESCRIBED IN SUBPARAGRAPH (I) OR (II) OF PARAGRAPH ONE OF THIS SUBDIVISION. (C) IF THE JUDGMENT UNDER SUBDIVISION (B) OF THIS SECTION IS BASED UPON THE VALUE OF THE ASSET TRANSFERRED, THE JUDGMENT MUST BE FOR AN AMOUNT EQUAL TO THE VALUE OF THE ASSET AT THE TIME OF THE TRANSFER, SUBJECT TO ADJUSTMENT AS THE EQUITIES MAY REQUIRE. (D) NOTWITHSTANDING VOIDABILITY OF A TRANSFER OR AN OBLIGATION UNDER THIS ARTICLE, A GOOD-FAITH TRANSFEREE OR OBLIGEE IS ENTITLED, TO THE EXTENT OF THE VALUE GIVEN THE DEBTOR FOR THE TRANSFER OR OBLIGATION, TO: (1) A LIEN ON OR A RIGHT TO RETAIN AN INTEREST IN THE ASSET TRANS- FERRED; (2) ENFORCEMENT OF AN OBLIGATION INCURRED; OR (3) A REDUCTION IN THE AMOUNT OF THE LIABILITY ON THE JUDGMENT. (E) A TRANSFER IS NOT VOIDABLE UNDER PARAGRAPH TWO OF SUBDIVISION (A) OF SECTION TWO HUNDRED SEVENTY-THREE OR SECTION TWO HUNDRED SEVENTY-FOUR OF THIS ARTICLE IF THE TRANSFER RESULTS FROM: (1) TERMINATION OF A LEASE UPON DEFAULT BY THE DEBTOR WHEN THE TERMI- NATION IS PURSUANT TO THE LEASE AND APPLICABLE LAW; OR (2) ENFORCEMENT OF A SECURITY INTEREST IN COMPLIANCE WITH ARTICLE NINE OF THE UNIFORM COMMERCIAL CODE, OTHER THAN ACCEPTANCE OF COLLATERAL IN FULL OR PARTIAL SATISFACTION OF THE OBLIGATION IT SECURES. (F) A TRANSFER IS NOT VOIDABLE UNDER SUBDIVISION (B) OF SECTION TWO HUNDRED SEVENTY-FOUR OF THIS ARTICLE: (1) TO THE EXTENT THE INSIDER GAVE NEW VALUE TO OR FOR THE BENEFIT OF THE DEBTOR AFTER THE TRANSFER WAS MADE, EXCEPT TO THE EXTENT THE NEW VALUE WAS SECURED BY A VALID LIEN; (2) IF MADE IN THE ORDINARY COURSE OF BUSINESS OR FINANCIAL AFFAIRS OF THE DEBTOR AND THE INSIDER; OR (3) IF MADE PURSUANT TO A GOOD-FAITH EFFORT TO REHABILITATE THE DEBTOR AND THE TRANSFER SECURED PRESENT VALUE GIVEN FOR THAT PURPOSE AS WELL AS AN ANTECEDENT DEBT OF THE DEBTOR. (G) THE FOLLOWING RULES DETERMINE THE BURDEN OF PROVING MATTERS REFERRED TO IN THIS SECTION: (1) A PARTY THAT SEEKS TO INVOKE SUBDIVISION (A), (D), (E) OR (F) OF THIS SECTION HAS THE BURDEN OF PROVING THE APPLICABILITY OF THAT SUBDI- VISION. (2) EXCEPT AS OTHERWISE PROVIDED IN PARAGRAPHS THREE AND FOUR OF THIS SUBDIVISION, THE CREDITOR HAS THE BURDEN OF PROVING EACH APPLICABLE ELEMENT OF SUBDIVISION (B) OR (C) OF THIS SECTION. (3) THE TRANSFEREE HAS THE BURDEN OF PROVING THE APPLICABILITY TO THE TRANSFEREE OF CLAUSE (A) OR (B) OF SUBPARAGRAPH (II) OF PARAGRAPH ONE OF SUBDIVISION (B) OF THIS SECTION. (4) A PARTY THAT SEEKS ADJUSTMENT UNDER SUBDIVISION (C) OF THIS SECTION HAS THE BURDEN OF PROVING THE ADJUSTMENT. (H) THE STANDARD OF PROOF REQUIRED TO ESTABLISH MATTERS REFERRED TO IN THIS SECTION IS PREPONDERANCE OF THE EVIDENCE. § 278. EXTINGUISHMENT OF CLAIM FOR RELIEF. A CLAIM FOR RELIEF WITH RESPECT TO A TRANSFER OR OBLIGATION UNDER THIS ARTICLE IS EXTINGUISHED UNLESS ACTION IS BROUGHT: (A) UNDER PARAGRAPH ONE OF SUBDIVISION (A) OF SECTION TWO HUNDRED SEVENTY-THREE OF THIS ARTICLE, NOT LATER THAN FOUR YEARS AFTER THE TRANSFER WAS MADE OR THE OBLIGATION WAS INCURRED OR, IF LATER, NOT LATER THAN ONE YEAR AFTER THE TRANSFER OR OBLIGATION WAS OR COULD REASONABLY HAVE BEEN DISCOVERED BY THE CLAIMANT; (B) UNDER PARAGRAPH TWO OF SUBDIVISION (A) OF SECTION TWO HUNDRED SEVENTY-THREE OR SUBDIVISION (A) OF SECTION TWO HUNDRED SEVENTY-FOUR OF S. 4236 8 THIS ARTICLE, NOT LATER THAN FOUR YEARS AFTER THE TRANSFER WAS MADE OR THE OBLIGATION WAS INCURRED; OR (C) UNDER SUBDIVISION (B) OF SECTION TWO HUNDRED SEVENTY-FOUR OF THIS ARTICLE, NOT LATER THAN ONE YEAR AFTER THE TRANSFER WAS MADE. § 279. GOVERNING LAW. (A) IN THIS SECTION, THE FOLLOWING RULES DETER- MINE A DEBTOR'S LOCATION: (1) A DEBTOR WHO IS AN INDIVIDUAL IS LOCATED AT THE INDIVIDUAL'S PRIN- CIPAL RESIDENCE. (2) A DEBTOR THAT IS AN ORGANIZATION AND HAS ONLY ONE PLACE OF BUSI- NESS IS LOCATED AT ITS PLACE OF BUSINESS. (3) A DEBTOR THAT IS AN ORGANIZATION AND HAS MORE THAN ONE PLACE OF BUSINESS IS LOCATED AT ITS CHIEF EXECUTIVE OFFICE. (B) A CLAIM FOR RELIEF IN THE NATURE OF A CLAIM FOR RELIEF UNDER THIS ARTICLE IS GOVERNED BY THE LOCAL LAW OF THE JURISDICTION IN WHICH THE DEBTOR IS LOCATED WHEN THE TRANSFER IS MADE OR THE OBLIGATION IS INCURRED. § 280. SUPPLEMENTARY PROVISIONS. UNLESS DISPLACED BY THE PROVISIONS OF THIS ARTICLE, THE PRINCIPLES OF LAW AND EQUITY, INCLUDING THE LAW MERCHANT AND THE LAW RELATING TO PRINCIPAL AND AGENT, ESTOPPEL, LACHES, FRAUD, MISREPRESENTATION, DURESS, COERCION, MISTAKE, INSOLVENCY, OR OTHER VALIDATING OR INVALIDATING CAUSE, SUPPLEMENT ITS PROVISIONS. § 281. UNIFORMITY OF APPLICATION AND CONSTRUCTION. THIS ARTICLE SHALL BE APPLIED AND CONSTRUED TO EFFECTUATE ITS GENERAL PURPOSE TO MAKE UNIFORM THE LAW WITH RESPECT TO THE SUBJECT OF THIS ARTICLE AMONG STATES ENACTING IT. § 281-A. RELATION TO ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT. THIS ARTICLE MODIFIES, LIMITS, OR SUPERSEDES THE ELECTRON- IC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT, 15 U.S.C. SECTION 7001 ET SEQ., BUT DOES NOT MODIFY, LIMIT, OR SUPERSEDE SECTION 101(C) OF THAT ACT, 15 U.S.C. SECTION 7001(C), OR AUTHORIZE ELECTRONIC DELIVERY OF ANY OF THE NOTICES DESCRIBED IN SECTION 103(B) OF THAT ACT, 15 U.S.C. SECTION 7003(B). § 3. Paragraph 5 of subdivision (c) of section 5205 of the civil prac- tice law and rules, as amended by chapter 93 of the laws of 1995, is amended to read as follows: 5. Additions to an asset described in paragraph two of this subdivi- sion shall not be exempt from application to the satisfaction of a money judgment if (i) made after the date that is ninety days before the interposition of the claim on which such judgment was entered, or (ii) deemed to be [fraudulent conveyances] VOIDABLE TRANSACTIONS under arti- cle ten of the debtor and creditor law. § 4. Subdivision (g) of section 5519 of the civil practice law and rules, as added by chapter 184 of the laws of 1988, is amended to read as follows: (g) Appeals in medical, dental or podiatric malpractice judgments. In an action for medical, dental or podiatric malpractice, if an appeal is taken from a judgment in excess of one million dollars and an undertak- ing in the amount of one million dollars or the limit of insurance coverage available to the appellant for the occurrence, whichever is greater, is given together with a joint undertaking by the appellant and any insurer of the appellant's professional liability that, during the period of such stay, the appellant will make no [fraudulent conveyance without fair consideration] VOIDABLE TRANSACTION as described in [section two hundred seventy-three-a] ARTICLE TEN of the debtor and creditor law, the court to which such an appeal is taken shall stay all proceedings to enforce the judgment pending such appeal if it finds that S. 4236 9 there is a reasonable probability that the judgment may be reversed or determined excessive. In making a determination under this subdivision, the court shall not consider the availability of a stay pursuant to subdivision (a) or (b) of this section. Liability under such joint undertaking shall be limited to [fraudulent conveyances] VOIDABLE TRANS- ACTIONS made by the appellant subsequent to the execution of such under- taking and during the period of such stay, but nothing herein shall limit the liability of the appellant for [fraudulent conveyances] VOIDA- BLE TRANSACTIONS pursuant to article ten of the debtor and creditor law or any other law. An insurer that pays money to a beneficiary of such a joint undertaking shall thereupon be subrogated, to the extent of the amount to be paid, to the rights and interests of such beneficiary, as a judgment creditor, against the appellant on whose behalf the joint undertaking was executed. § 5. Subparagraph 4 of paragraph (b) of section 7-3.1 of the estates, powers and trusts law, as amended by chapter 206 of the laws of 1998, is amended to read as follows: (4) Additions to an asset described in subparagraph one of this para- graph shall not be exempt from application to the satisfaction of a money judgment if (i) made after the date that is ninety days before the interposition of the claim on which such judgment was entered, or (ii) deemed to be [fraudulent conveyances] VOIDABLE TRANSACTIONS under arti- cle ten of the debtor and creditor law. § 6. Paragraph 3 of subdivision 3-a of section 50 of the workers' compensation law, as amended by chapter 139 of the laws of 2008, is amended to read as follows: (3) A member's participation in a group self-insurer shall not relieve it of its liability for compensation prescribed by this chapter except by the payment thereof by the group self-insurer or by itself. Each member shall be responsible, jointly and severally, for all liabilities of the group self-insurer provided for by this chapter occurring during its respective period of membership, and such liability shall attach to any recipient of a conveyance of assets made in violation of SUBDIVISION (A) OF section two hundred [seventy-three] SEVENTY-FOUR of the debtor and creditor law. As between the employee and the group self-insurer, notice to or knowledge of the occurrence of the injury on the part of the member shall be deemed notice or knowledge, as the case may be, on the part of the group self-insurer; jurisdiction of the member shall, for the purpose of this chapter, be jurisdiction of the group self-in- surer and such group self-insurer shall in all things be bound by and subject to the orders, findings, decisions or awards rendered against the participating member for the payment of compensation under the provisions of this chapter. The insolvency or bankruptcy of a partic- ipating member shall not relieve the group self-insurer from the payment of compensation for injuries or death sustained by an employee during the time the member was a participant in such group self-insurer. Notice of termination of a participating member shall not be effective until at least ten days after notice of such termination, on a prescribed form, has been either filed in the office of the chair or sent by certified or registered letter, return receipt requested, and also served in like manner upon the member. In the event such termination is due to a member's failure to pay required contributions, such member's termi- nation shall not be rescinded more than three times. § 7. This act shall take effect one hundred twenty days after it shall have become a law, and shall apply to a transfer made or obligation incurred on or after such effective date, but shall not apply to a S. 4236 10 transfer made or obligation incurred before such effective date, nor shall it apply to a right of action that has accrued before such effec- tive date. For the purposes of this act, a transfer is made and an obli- gation is incurred at the time provided in section 275 of the debtor and creditor law, as added by section two of this act.
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