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Statutes > North-dakota > T13 > T13c021

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CHAPTER 13-02.1UNIFORM FRAUDULENT TRANSFER ACT13-02.1-01. Definitions. As used in this chapter:1.&quot;Affiliate&quot; means:a.A person who directly or indirectly owns, controls, or holds with power to vote,<br>twenty percent or more of the outstanding voting securities of the debtor, other<br>than a person who holds the securities as a fiduciary or agent without sole<br>discretionary power to vote the securities or solely to secure a debt, if the<br>person has not exercised the power to vote;b.A corporation or a limited liability company twenty percent or more of whose<br>outstanding voting securities are directly or indirectly owned, controlled, or held<br>with power to vote, by the debtor, or by a person who directly or indirectly owns,<br>controls, or holds with power to vote, twenty percent or more of the outstanding<br>voting securities of the debtor, other than a person who holds the securities as<br>a fiduciary or agent without sole power to vote the securities or solely to secure<br>a debt, if the person has not in fact exercised the power to vote;c.A person whose business is operated by the debtor under a lease or other<br>agreement, or a person substantially all of whose assets are controlled by the<br>debtor; ord.A person who operates the debtor's business under a lease or other agreement<br>or controls substantially all of the debtor's assets.2.&quot;Asset&quot; means property of a debtor, excluding property to the extent it is<br>encumbered by a valid lien, property to the extent it is generally exempt under<br>nonbankruptcy law, or an interest in property held in tenancy by the entireties to the<br>extent it is not subject to process by a creditor holding a claim against only one<br>tenant.3.&quot;Claim&quot; means a right to payment, whether or not the right is reduced to judgment,<br>liquidated,unliquidated,fixed,contingent,matured,unmatured,disputed,undisputed, legal, equitable, secured, or unsecured.4.&quot;Creditor&quot; means a person who has a claim.5.&quot;Debt&quot; means liability on a claim.6.&quot;Debtor&quot; means a person who is liable on a claim.7.&quot;Insider&quot; means:a.If the debtor is an individual, an &quot;insider&quot; includes a relative of the debtor or of a<br>general partner of the debtor, a partnership in which the debtor is a general<br>partner, a general partner in a partnership in which the debtor is a general<br>partner, a corporation of which the debtor is a director, officer, or person in<br>control, or a limited liability company of which the debtor is a governor,<br>manager, or person in control.b.If the debtor is a corporation, an &quot;insider&quot; includes a director of the debtor, an<br>officer of the debtor, a person in control of the debtor, a partnership in which the<br>debtor is a general partner, a general partner in a partnership in which the<br>debtor is a general partner, or a relative of a general partner, director, officer, or<br>person in control of the debtor.Page No. 1c.If the debtor is a partnership, an &quot;insider&quot; includes a general partner in the<br>debtor, a relative of a general partner in, of a general partner of, or of a person<br>in control of the debtor, another partnership in which the debtor is a general<br>partner, a general partner in a partnership in which the debtor is a general<br>partner, or a person in control of the debtor.d.If the debtor is a limited liability company, an &quot;insider&quot; includes a governor of<br>the debtor, a manager of the debtor, a person in control of the debtor, a<br>partnership in which the debtor is a general partner, a general partner in a<br>partnership in which the debtor is a general partner or a relative of a general<br>partner, governor, manager, or person in control of the debtor.e.An &quot;insider&quot; also includes an affiliate, or an insider of an affiliate as if the affiliate<br>were the debtor, and a managing agent of the debtor.8.&quot;Lien&quot; means a charge against or an interest in property to secure payment of a debt<br>or performance of an obligation, and includes a security interest created by<br>agreement, a judicial lien, a common-law lien, or a statutory lien.9.&quot;Person&quot; means an individual, partnership, corporation, limited liability company,<br>association, organization, government or governmental subdivision or agency,<br>business trust, estate, trust, or any other legal or commercial entity.10.&quot;Property&quot; means anything that may be the subject of ownership.11.&quot;Relative&quot; means an individual related by consanguinity within the third degree as<br>determined by the common law, a spouse, or an individual related to a spouse within<br>the third degree as so determined, and includes an individual in an adoptive<br>relationship within the third degree.12.&quot;Transfer&quot; means every mode, direct or indirect, absolute or conditional, voluntary or<br>involuntary, of disposing of or parting with an asset or an interest in an asset, and<br>includes payment of money, release, lease, and creation of a lien or other<br>encumbrance.13.&quot;Valid lien&quot; means a lien that is effective against the holder of a judicial lien<br>subsequently obtained by legal process or proceedings.13-02.1-02. Insolvency.1.A debtor is insolvent if the sum of the debtor's debts is greater than all of the debtor's<br>assets at a fair valuation.A debtor who is generally not paying debts as theybecome due is presumed to be insolvent. A partnership is insolvent if the sum of the<br>partnership's debts is greater than the aggregate, at a fair valuation, of all of the<br>partnership's assets and the sum of the excess of the value of each general<br>partner's nonpartnership assets over the partner's nonpartnership debts.2.Assets under this section do not include property that has been transferred,<br>concealed, or removed with intent to hinder, delay, or defraud creditors or that has<br>been transferred in a manner making the transfer voidable under this chapter.3.Debts under this section do not include an obligation to the extent it is secured by a<br>valid lien on property of the debtor not included as an asset.13-02.1-03. Value.1.Value is given for a transfer or an obligation if, in exchange for the transfer or<br>obligation, property is transferred or an antecedent debt is secured or satisfied, butPage No. 2value does not include an unperformed promise made otherwise than in the ordinary<br>course of the promisor's business to furnish support to the debtor or another person.2.For the purposes of subdivision b of subsection 1 of section 13-02.1-04 and section<br>13-02.1-05, a person gives a reasonably equivalent value if the person acquires an<br>interest of the debtor in an asset pursuant to a regularly conducted, noncollusive<br>foreclosure sale or execution of a power of sale for the acquisition or disposition of<br>the interest of the debtor upon default under a mortgage, deed of trust, or security<br>agreement.3.A transfer is made for present value if the exchange between the debtor and the<br>transferee is intended by them to be contemporaneous and is in fact substantially<br>contemporaneous.13-02.1-04. Transfers fraudulent as to present and future creditors.1.A transfer made or obligation incurred by a debtor is fraudulent as to a creditor,<br>whether the creditor's claim arose before or after the transfer was made or the<br>obligation was incurred, if the debtor made the transfer or incurred the obligation:a.With actual intent to hinder, delay, or defraud any creditor of the debtor; orb.Without receiving a reasonably equivalent value in exchange for the transfer or<br>obligation, and the debtor was engaged or was about to engage in a business<br>or a transaction for which the remaining assets of the debtor were<br>unreasonably small in relation to the business or transaction or the debtor<br>intended to incur, or believed or reasonably should have believed that the<br>debtor would incur, debts beyond the debtor's ability to pay as they became<br>due.2.In determining actual intent under subdivision a of subsection 1, consideration may<br>be given, among other factors, to whether:a.The transfer or obligation was to an insider;b.The debtor retained possession or control of the property transferred after the<br>transfer;c.The transfer or obligation was disclosed or concealed;d.Before the transfer was made or obligation was incurred, the debtor had been<br>sued or threatened with suit;e.The transfer was of substantially all the debtor's assets;f.The debtor absconded;g.The debtor removed or concealed assets;h.The value of the consideration received by the debtor was reasonably<br>equivalent to the value of the asset transferred or the amount of the obligation<br>incurred;i.The debtor was insolvent or became insolvent shortly after the transfer was<br>made or the obligation was incurred;j.The transfer occurred shortly before or shortly after a substantial debt was<br>incurred; andPage No. 3k.The debtor transferred the essential assets of the business to a lienor who<br>transferred the assets to an insider of the debtor.13-02.1-05. Transfers fraudulent as to present creditors.1.A transfer made or obligation incurred by a debtor is fraudulent as to a creditor<br>whose claim arose before the transfer was made or the obligation was incurred if the<br>debtor made the transfer or incurred the obligation without receiving a reasonably<br>equivalent value in exchange for the transfer or obligation and the debtor was<br>insolvent at that time or the debtor became insolvent as a result of the transfer or<br>obligation.2.A transfer made by a debtor is fraudulent as to a creditor whose claim arose before<br>the transfer was made if the transfer was made to an insider for an antecedent debt,<br>the debtor was insolvent at that time, and the insider had reasonable cause to<br>believe that the debtor was insolvent.13-02.1-06. When transfer is made or obligation is incurred. For the purposes of thischapter:1.A transfer is made with respect to an asset that is real property other than a fixture,<br>but including the interest of a seller or purchaser under a contract for the sale of the<br>asset, when the transfer is so far perfected that a good-faith purchaser of the asset<br>from the debtor against whom applicable law permits the transfer to be perfected<br>cannot acquire an interest in the asset that is superior to the interest of the<br>transferee. A transfer is made with respect to an asset that is not real property or<br>that is a fixture, when the transfer is so far perfected that a creditor on a simple<br>contract cannot acquire a judicial lien otherwise than under this chapter that is<br>superior to the interest of the transferee.2.If applicable law permits the transfer to be perfected as provided in subsection 1 and<br>the transfer is not so perfected before the commencement of an action for relief<br>under this chapter, the transfer is deemed to have been made immediately before<br>the commencement of the action.3.If applicable law does not permit the transfer to be perfected as provided in<br>subsection 1, the transfer is made when it becomes effective between the debtor<br>and the transferee.4.A transfer is not made until the debtor has acquired rights in the asset transferred.5.An oral obligation is incurred when it becomes effective between the parties. An<br>obligation evidenced by a writing is incurred when the writing executed by the obligor<br>is delivered to or for the benefit of the obligee.13-02.1-07. Remedies of creditors.1.In an action for relief against a transfer or obligation under this chapter, a creditor,<br>subject to the limitations in section 13-02.1-08, may obtain:a.Avoidance of the transfer or obligation to the extent necessary to satisfy the<br>creditor's claim;b.Attachment or other provisional remedy against the asset transferred or other<br>property of the transferee in accordance with the procedure prescribed by<br>chapter 32-08.1; orc.Subject to applicable principles of equity and in accordance with applicable<br>rules of civil procedure, an injunction against further disposition by the debtor orPage No. 4a transferee, or both, of the asset transferred or of other property, an<br>appointment of a receiver to take charge of the asset transferred or of other<br>property of the transferee, or any other relief the circumstances may require.2.If a creditor has obtained a judgment on a claim against the debtor, the creditor, if<br>the court so orders, may levy execution on the asset transferred or its proceeds.13-02.1-08. Defenses - Liability - Protection of transferee.1.A transfer or obligation is not voidable under subdivision a of subsection 1 of section<br>13-02.1-04 against a person who took in good faith and for a reasonably equivalent<br>value or against any subsequent transferee or obligee.2.Except as otherwise provided in this section, to the extent a transfer is voidable in an<br>action by a creditor under subdivision a of subsection 1 of section 13-02.1-07, the<br>creditor may recover judgment for the value of the asset transferred, as adjusted<br>under subsection 3, or the amount necessary to satisfy the creditor's claim,<br>whichever is less. The judgment may be entered against the first transferee of the<br>asset or the person for whose benefit the transfer was made or any subsequent<br>transferee other than a good-faith transferee who took for value or from any<br>subsequent transferee.3.If the judgment under subsection 2 is based upon the value of the asset transferred,<br>the judgment must be for an amount equal to the value of the asset at the time of the<br>transfer, subject to adjustment as the equities may require.4.Notwithstanding voidability of a transfer or an obligation under this chapter, a<br>good-faith transferee or obligee is entitled, to the extent of the value given the debtor<br>for the transfer or obligation, to a lien on or a right to retain any interest in the asset<br>transferred, enforcement of any obligation incurred, or a reduction in the amount of<br>the liability on the judgment.5.A transfer is not voidable under subdivision b of subsection 1 of section 13-02.1-04<br>or section 13-02.1-05 if the transfer results from termination of a lease upon default<br>by the debtor when the termination is pursuant to the lease and applicable law or<br>enforcement of a security interest in compliance with chapter 41-09.6.A transfer is not voidable under subsection 2 of section 13-02.1-05:a.To the extent the insider gave new value to or for the benefit of the debtor after<br>the transfer was made unless the new value was secured by a valid lien;b.If made in the ordinary course of business or financial affairs of the debtor and<br>the insider; orc.If made pursuant to a good-faith effort to rehabilitate the debtor and the transfer<br>secured present value given for that purpose as well as an antecedent debt of<br>the debtor.13-02.1-09. Extinguishment of claim for relief. A claim for relief with respect to afraudulent transfer or obligation under this chapter is extinguished unless action is brought:1.Under subdivision a of subsection 1 of section 13-02.1-04, within four years after the<br>transfer was made or the obligation was incurred or, if later, within one year after the<br>transfer or obligation was or could reasonably have been discovered by the<br>claimant;Page No. 52.Under subdivision b of subsection 1 of section 13-02.1-04 or subsection 1 of section<br>13-02.1-05, within four years after the transfer was made or the obligation was<br>incurred; or3.Under subsection 2 of section 13-02.1-05, within one year after the transfer was<br>made or the obligation was incurred.13-02.1-10.Supplementary provisions.Unless displaced by the provisions of thischapter, the principles of law and equity, including the law merchant and the law relating to<br>principal and agent, estoppel, laches, fraud, misrepresentation, duress, coercion, mistake,<br>insolvency, or other validating or invalidating cause, supplement their provisions.Page No. 6Document Outlinechapter 13-02.1 uniform fraudulent transfer act

State Codes and Statutes

Statutes > North-dakota > T13 > T13c021

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CHAPTER 13-02.1UNIFORM FRAUDULENT TRANSFER ACT13-02.1-01. Definitions. As used in this chapter:1.&quot;Affiliate&quot; means:a.A person who directly or indirectly owns, controls, or holds with power to vote,<br>twenty percent or more of the outstanding voting securities of the debtor, other<br>than a person who holds the securities as a fiduciary or agent without sole<br>discretionary power to vote the securities or solely to secure a debt, if the<br>person has not exercised the power to vote;b.A corporation or a limited liability company twenty percent or more of whose<br>outstanding voting securities are directly or indirectly owned, controlled, or held<br>with power to vote, by the debtor, or by a person who directly or indirectly owns,<br>controls, or holds with power to vote, twenty percent or more of the outstanding<br>voting securities of the debtor, other than a person who holds the securities as<br>a fiduciary or agent without sole power to vote the securities or solely to secure<br>a debt, if the person has not in fact exercised the power to vote;c.A person whose business is operated by the debtor under a lease or other<br>agreement, or a person substantially all of whose assets are controlled by the<br>debtor; ord.A person who operates the debtor's business under a lease or other agreement<br>or controls substantially all of the debtor's assets.2.&quot;Asset&quot; means property of a debtor, excluding property to the extent it is<br>encumbered by a valid lien, property to the extent it is generally exempt under<br>nonbankruptcy law, or an interest in property held in tenancy by the entireties to the<br>extent it is not subject to process by a creditor holding a claim against only one<br>tenant.3.&quot;Claim&quot; means a right to payment, whether or not the right is reduced to judgment,<br>liquidated,unliquidated,fixed,contingent,matured,unmatured,disputed,undisputed, legal, equitable, secured, or unsecured.4.&quot;Creditor&quot; means a person who has a claim.5.&quot;Debt&quot; means liability on a claim.6.&quot;Debtor&quot; means a person who is liable on a claim.7.&quot;Insider&quot; means:a.If the debtor is an individual, an &quot;insider&quot; includes a relative of the debtor or of a<br>general partner of the debtor, a partnership in which the debtor is a general<br>partner, a general partner in a partnership in which the debtor is a general<br>partner, a corporation of which the debtor is a director, officer, or person in<br>control, or a limited liability company of which the debtor is a governor,<br>manager, or person in control.b.If the debtor is a corporation, an &quot;insider&quot; includes a director of the debtor, an<br>officer of the debtor, a person in control of the debtor, a partnership in which the<br>debtor is a general partner, a general partner in a partnership in which the<br>debtor is a general partner, or a relative of a general partner, director, officer, or<br>person in control of the debtor.Page No. 1c.If the debtor is a partnership, an &quot;insider&quot; includes a general partner in the<br>debtor, a relative of a general partner in, of a general partner of, or of a person<br>in control of the debtor, another partnership in which the debtor is a general<br>partner, a general partner in a partnership in which the debtor is a general<br>partner, or a person in control of the debtor.d.If the debtor is a limited liability company, an &quot;insider&quot; includes a governor of<br>the debtor, a manager of the debtor, a person in control of the debtor, a<br>partnership in which the debtor is a general partner, a general partner in a<br>partnership in which the debtor is a general partner or a relative of a general<br>partner, governor, manager, or person in control of the debtor.e.An &quot;insider&quot; also includes an affiliate, or an insider of an affiliate as if the affiliate<br>were the debtor, and a managing agent of the debtor.8.&quot;Lien&quot; means a charge against or an interest in property to secure payment of a debt<br>or performance of an obligation, and includes a security interest created by<br>agreement, a judicial lien, a common-law lien, or a statutory lien.9.&quot;Person&quot; means an individual, partnership, corporation, limited liability company,<br>association, organization, government or governmental subdivision or agency,<br>business trust, estate, trust, or any other legal or commercial entity.10.&quot;Property&quot; means anything that may be the subject of ownership.11.&quot;Relative&quot; means an individual related by consanguinity within the third degree as<br>determined by the common law, a spouse, or an individual related to a spouse within<br>the third degree as so determined, and includes an individual in an adoptive<br>relationship within the third degree.12.&quot;Transfer&quot; means every mode, direct or indirect, absolute or conditional, voluntary or<br>involuntary, of disposing of or parting with an asset or an interest in an asset, and<br>includes payment of money, release, lease, and creation of a lien or other<br>encumbrance.13.&quot;Valid lien&quot; means a lien that is effective against the holder of a judicial lien<br>subsequently obtained by legal process or proceedings.13-02.1-02. Insolvency.1.A debtor is insolvent if the sum of the debtor's debts is greater than all of the debtor's<br>assets at a fair valuation.A debtor who is generally not paying debts as theybecome due is presumed to be insolvent. A partnership is insolvent if the sum of the<br>partnership's debts is greater than the aggregate, at a fair valuation, of all of the<br>partnership's assets and the sum of the excess of the value of each general<br>partner's nonpartnership assets over the partner's nonpartnership debts.2.Assets under this section do not include property that has been transferred,<br>concealed, or removed with intent to hinder, delay, or defraud creditors or that has<br>been transferred in a manner making the transfer voidable under this chapter.3.Debts under this section do not include an obligation to the extent it is secured by a<br>valid lien on property of the debtor not included as an asset.13-02.1-03. Value.1.Value is given for a transfer or an obligation if, in exchange for the transfer or<br>obligation, property is transferred or an antecedent debt is secured or satisfied, butPage No. 2value does not include an unperformed promise made otherwise than in the ordinary<br>course of the promisor's business to furnish support to the debtor or another person.2.For the purposes of subdivision b of subsection 1 of section 13-02.1-04 and section<br>13-02.1-05, a person gives a reasonably equivalent value if the person acquires an<br>interest of the debtor in an asset pursuant to a regularly conducted, noncollusive<br>foreclosure sale or execution of a power of sale for the acquisition or disposition of<br>the interest of the debtor upon default under a mortgage, deed of trust, or security<br>agreement.3.A transfer is made for present value if the exchange between the debtor and the<br>transferee is intended by them to be contemporaneous and is in fact substantially<br>contemporaneous.13-02.1-04. Transfers fraudulent as to present and future creditors.1.A transfer made or obligation incurred by a debtor is fraudulent as to a creditor,<br>whether the creditor's claim arose before or after the transfer was made or the<br>obligation was incurred, if the debtor made the transfer or incurred the obligation:a.With actual intent to hinder, delay, or defraud any creditor of the debtor; orb.Without receiving a reasonably equivalent value in exchange for the transfer or<br>obligation, and the debtor was engaged or was about to engage in a business<br>or a transaction for which the remaining assets of the debtor were<br>unreasonably small in relation to the business or transaction or the debtor<br>intended to incur, or believed or reasonably should have believed that the<br>debtor would incur, debts beyond the debtor's ability to pay as they became<br>due.2.In determining actual intent under subdivision a of subsection 1, consideration may<br>be given, among other factors, to whether:a.The transfer or obligation was to an insider;b.The debtor retained possession or control of the property transferred after the<br>transfer;c.The transfer or obligation was disclosed or concealed;d.Before the transfer was made or obligation was incurred, the debtor had been<br>sued or threatened with suit;e.The transfer was of substantially all the debtor's assets;f.The debtor absconded;g.The debtor removed or concealed assets;h.The value of the consideration received by the debtor was reasonably<br>equivalent to the value of the asset transferred or the amount of the obligation<br>incurred;i.The debtor was insolvent or became insolvent shortly after the transfer was<br>made or the obligation was incurred;j.The transfer occurred shortly before or shortly after a substantial debt was<br>incurred; andPage No. 3k.The debtor transferred the essential assets of the business to a lienor who<br>transferred the assets to an insider of the debtor.13-02.1-05. Transfers fraudulent as to present creditors.1.A transfer made or obligation incurred by a debtor is fraudulent as to a creditor<br>whose claim arose before the transfer was made or the obligation was incurred if the<br>debtor made the transfer or incurred the obligation without receiving a reasonably<br>equivalent value in exchange for the transfer or obligation and the debtor was<br>insolvent at that time or the debtor became insolvent as a result of the transfer or<br>obligation.2.A transfer made by a debtor is fraudulent as to a creditor whose claim arose before<br>the transfer was made if the transfer was made to an insider for an antecedent debt,<br>the debtor was insolvent at that time, and the insider had reasonable cause to<br>believe that the debtor was insolvent.13-02.1-06. When transfer is made or obligation is incurred. For the purposes of thischapter:1.A transfer is made with respect to an asset that is real property other than a fixture,<br>but including the interest of a seller or purchaser under a contract for the sale of the<br>asset, when the transfer is so far perfected that a good-faith purchaser of the asset<br>from the debtor against whom applicable law permits the transfer to be perfected<br>cannot acquire an interest in the asset that is superior to the interest of the<br>transferee. A transfer is made with respect to an asset that is not real property or<br>that is a fixture, when the transfer is so far perfected that a creditor on a simple<br>contract cannot acquire a judicial lien otherwise than under this chapter that is<br>superior to the interest of the transferee.2.If applicable law permits the transfer to be perfected as provided in subsection 1 and<br>the transfer is not so perfected before the commencement of an action for relief<br>under this chapter, the transfer is deemed to have been made immediately before<br>the commencement of the action.3.If applicable law does not permit the transfer to be perfected as provided in<br>subsection 1, the transfer is made when it becomes effective between the debtor<br>and the transferee.4.A transfer is not made until the debtor has acquired rights in the asset transferred.5.An oral obligation is incurred when it becomes effective between the parties. An<br>obligation evidenced by a writing is incurred when the writing executed by the obligor<br>is delivered to or for the benefit of the obligee.13-02.1-07. Remedies of creditors.1.In an action for relief against a transfer or obligation under this chapter, a creditor,<br>subject to the limitations in section 13-02.1-08, may obtain:a.Avoidance of the transfer or obligation to the extent necessary to satisfy the<br>creditor's claim;b.Attachment or other provisional remedy against the asset transferred or other<br>property of the transferee in accordance with the procedure prescribed by<br>chapter 32-08.1; orc.Subject to applicable principles of equity and in accordance with applicable<br>rules of civil procedure, an injunction against further disposition by the debtor orPage No. 4a transferee, or both, of the asset transferred or of other property, an<br>appointment of a receiver to take charge of the asset transferred or of other<br>property of the transferee, or any other relief the circumstances may require.2.If a creditor has obtained a judgment on a claim against the debtor, the creditor, if<br>the court so orders, may levy execution on the asset transferred or its proceeds.13-02.1-08. Defenses - Liability - Protection of transferee.1.A transfer or obligation is not voidable under subdivision a of subsection 1 of section<br>13-02.1-04 against a person who took in good faith and for a reasonably equivalent<br>value or against any subsequent transferee or obligee.2.Except as otherwise provided in this section, to the extent a transfer is voidable in an<br>action by a creditor under subdivision a of subsection 1 of section 13-02.1-07, the<br>creditor may recover judgment for the value of the asset transferred, as adjusted<br>under subsection 3, or the amount necessary to satisfy the creditor's claim,<br>whichever is less. The judgment may be entered against the first transferee of the<br>asset or the person for whose benefit the transfer was made or any subsequent<br>transferee other than a good-faith transferee who took for value or from any<br>subsequent transferee.3.If the judgment under subsection 2 is based upon the value of the asset transferred,<br>the judgment must be for an amount equal to the value of the asset at the time of the<br>transfer, subject to adjustment as the equities may require.4.Notwithstanding voidability of a transfer or an obligation under this chapter, a<br>good-faith transferee or obligee is entitled, to the extent of the value given the debtor<br>for the transfer or obligation, to a lien on or a right to retain any interest in the asset<br>transferred, enforcement of any obligation incurred, or a reduction in the amount of<br>the liability on the judgment.5.A transfer is not voidable under subdivision b of subsection 1 of section 13-02.1-04<br>or section 13-02.1-05 if the transfer results from termination of a lease upon default<br>by the debtor when the termination is pursuant to the lease and applicable law or<br>enforcement of a security interest in compliance with chapter 41-09.6.A transfer is not voidable under subsection 2 of section 13-02.1-05:a.To the extent the insider gave new value to or for the benefit of the debtor after<br>the transfer was made unless the new value was secured by a valid lien;b.If made in the ordinary course of business or financial affairs of the debtor and<br>the insider; orc.If made pursuant to a good-faith effort to rehabilitate the debtor and the transfer<br>secured present value given for that purpose as well as an antecedent debt of<br>the debtor.13-02.1-09. Extinguishment of claim for relief. A claim for relief with respect to afraudulent transfer or obligation under this chapter is extinguished unless action is brought:1.Under subdivision a of subsection 1 of section 13-02.1-04, within four years after the<br>transfer was made or the obligation was incurred or, if later, within one year after the<br>transfer or obligation was or could reasonably have been discovered by the<br>claimant;Page No. 52.Under subdivision b of subsection 1 of section 13-02.1-04 or subsection 1 of section<br>13-02.1-05, within four years after the transfer was made or the obligation was<br>incurred; or3.Under subsection 2 of section 13-02.1-05, within one year after the transfer was<br>made or the obligation was incurred.13-02.1-10.Supplementary provisions.Unless displaced by the provisions of thischapter, the principles of law and equity, including the law merchant and the law relating to<br>principal and agent, estoppel, laches, fraud, misrepresentation, duress, coercion, mistake,<br>insolvency, or other validating or invalidating cause, supplement their provisions.Page No. 6Document Outlinechapter 13-02.1 uniform fraudulent transfer act

State Codes and Statutes

State Codes and Statutes

Statutes > North-dakota > T13 > T13c021

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CHAPTER 13-02.1UNIFORM FRAUDULENT TRANSFER ACT13-02.1-01. Definitions. As used in this chapter:1.&quot;Affiliate&quot; means:a.A person who directly or indirectly owns, controls, or holds with power to vote,<br>twenty percent or more of the outstanding voting securities of the debtor, other<br>than a person who holds the securities as a fiduciary or agent without sole<br>discretionary power to vote the securities or solely to secure a debt, if the<br>person has not exercised the power to vote;b.A corporation or a limited liability company twenty percent or more of whose<br>outstanding voting securities are directly or indirectly owned, controlled, or held<br>with power to vote, by the debtor, or by a person who directly or indirectly owns,<br>controls, or holds with power to vote, twenty percent or more of the outstanding<br>voting securities of the debtor, other than a person who holds the securities as<br>a fiduciary or agent without sole power to vote the securities or solely to secure<br>a debt, if the person has not in fact exercised the power to vote;c.A person whose business is operated by the debtor under a lease or other<br>agreement, or a person substantially all of whose assets are controlled by the<br>debtor; ord.A person who operates the debtor's business under a lease or other agreement<br>or controls substantially all of the debtor's assets.2.&quot;Asset&quot; means property of a debtor, excluding property to the extent it is<br>encumbered by a valid lien, property to the extent it is generally exempt under<br>nonbankruptcy law, or an interest in property held in tenancy by the entireties to the<br>extent it is not subject to process by a creditor holding a claim against only one<br>tenant.3.&quot;Claim&quot; means a right to payment, whether or not the right is reduced to judgment,<br>liquidated,unliquidated,fixed,contingent,matured,unmatured,disputed,undisputed, legal, equitable, secured, or unsecured.4.&quot;Creditor&quot; means a person who has a claim.5.&quot;Debt&quot; means liability on a claim.6.&quot;Debtor&quot; means a person who is liable on a claim.7.&quot;Insider&quot; means:a.If the debtor is an individual, an &quot;insider&quot; includes a relative of the debtor or of a<br>general partner of the debtor, a partnership in which the debtor is a general<br>partner, a general partner in a partnership in which the debtor is a general<br>partner, a corporation of which the debtor is a director, officer, or person in<br>control, or a limited liability company of which the debtor is a governor,<br>manager, or person in control.b.If the debtor is a corporation, an &quot;insider&quot; includes a director of the debtor, an<br>officer of the debtor, a person in control of the debtor, a partnership in which the<br>debtor is a general partner, a general partner in a partnership in which the<br>debtor is a general partner, or a relative of a general partner, director, officer, or<br>person in control of the debtor.Page No. 1c.If the debtor is a partnership, an &quot;insider&quot; includes a general partner in the<br>debtor, a relative of a general partner in, of a general partner of, or of a person<br>in control of the debtor, another partnership in which the debtor is a general<br>partner, a general partner in a partnership in which the debtor is a general<br>partner, or a person in control of the debtor.d.If the debtor is a limited liability company, an &quot;insider&quot; includes a governor of<br>the debtor, a manager of the debtor, a person in control of the debtor, a<br>partnership in which the debtor is a general partner, a general partner in a<br>partnership in which the debtor is a general partner or a relative of a general<br>partner, governor, manager, or person in control of the debtor.e.An &quot;insider&quot; also includes an affiliate, or an insider of an affiliate as if the affiliate<br>were the debtor, and a managing agent of the debtor.8.&quot;Lien&quot; means a charge against or an interest in property to secure payment of a debt<br>or performance of an obligation, and includes a security interest created by<br>agreement, a judicial lien, a common-law lien, or a statutory lien.9.&quot;Person&quot; means an individual, partnership, corporation, limited liability company,<br>association, organization, government or governmental subdivision or agency,<br>business trust, estate, trust, or any other legal or commercial entity.10.&quot;Property&quot; means anything that may be the subject of ownership.11.&quot;Relative&quot; means an individual related by consanguinity within the third degree as<br>determined by the common law, a spouse, or an individual related to a spouse within<br>the third degree as so determined, and includes an individual in an adoptive<br>relationship within the third degree.12.&quot;Transfer&quot; means every mode, direct or indirect, absolute or conditional, voluntary or<br>involuntary, of disposing of or parting with an asset or an interest in an asset, and<br>includes payment of money, release, lease, and creation of a lien or other<br>encumbrance.13.&quot;Valid lien&quot; means a lien that is effective against the holder of a judicial lien<br>subsequently obtained by legal process or proceedings.13-02.1-02. Insolvency.1.A debtor is insolvent if the sum of the debtor's debts is greater than all of the debtor's<br>assets at a fair valuation.A debtor who is generally not paying debts as theybecome due is presumed to be insolvent. A partnership is insolvent if the sum of the<br>partnership's debts is greater than the aggregate, at a fair valuation, of all of the<br>partnership's assets and the sum of the excess of the value of each general<br>partner's nonpartnership assets over the partner's nonpartnership debts.2.Assets under this section do not include property that has been transferred,<br>concealed, or removed with intent to hinder, delay, or defraud creditors or that has<br>been transferred in a manner making the transfer voidable under this chapter.3.Debts under this section do not include an obligation to the extent it is secured by a<br>valid lien on property of the debtor not included as an asset.13-02.1-03. Value.1.Value is given for a transfer or an obligation if, in exchange for the transfer or<br>obligation, property is transferred or an antecedent debt is secured or satisfied, butPage No. 2value does not include an unperformed promise made otherwise than in the ordinary<br>course of the promisor's business to furnish support to the debtor or another person.2.For the purposes of subdivision b of subsection 1 of section 13-02.1-04 and section<br>13-02.1-05, a person gives a reasonably equivalent value if the person acquires an<br>interest of the debtor in an asset pursuant to a regularly conducted, noncollusive<br>foreclosure sale or execution of a power of sale for the acquisition or disposition of<br>the interest of the debtor upon default under a mortgage, deed of trust, or security<br>agreement.3.A transfer is made for present value if the exchange between the debtor and the<br>transferee is intended by them to be contemporaneous and is in fact substantially<br>contemporaneous.13-02.1-04. Transfers fraudulent as to present and future creditors.1.A transfer made or obligation incurred by a debtor is fraudulent as to a creditor,<br>whether the creditor's claim arose before or after the transfer was made or the<br>obligation was incurred, if the debtor made the transfer or incurred the obligation:a.With actual intent to hinder, delay, or defraud any creditor of the debtor; orb.Without receiving a reasonably equivalent value in exchange for the transfer or<br>obligation, and the debtor was engaged or was about to engage in a business<br>or a transaction for which the remaining assets of the debtor were<br>unreasonably small in relation to the business or transaction or the debtor<br>intended to incur, or believed or reasonably should have believed that the<br>debtor would incur, debts beyond the debtor's ability to pay as they became<br>due.2.In determining actual intent under subdivision a of subsection 1, consideration may<br>be given, among other factors, to whether:a.The transfer or obligation was to an insider;b.The debtor retained possession or control of the property transferred after the<br>transfer;c.The transfer or obligation was disclosed or concealed;d.Before the transfer was made or obligation was incurred, the debtor had been<br>sued or threatened with suit;e.The transfer was of substantially all the debtor's assets;f.The debtor absconded;g.The debtor removed or concealed assets;h.The value of the consideration received by the debtor was reasonably<br>equivalent to the value of the asset transferred or the amount of the obligation<br>incurred;i.The debtor was insolvent or became insolvent shortly after the transfer was<br>made or the obligation was incurred;j.The transfer occurred shortly before or shortly after a substantial debt was<br>incurred; andPage No. 3k.The debtor transferred the essential assets of the business to a lienor who<br>transferred the assets to an insider of the debtor.13-02.1-05. Transfers fraudulent as to present creditors.1.A transfer made or obligation incurred by a debtor is fraudulent as to a creditor<br>whose claim arose before the transfer was made or the obligation was incurred if the<br>debtor made the transfer or incurred the obligation without receiving a reasonably<br>equivalent value in exchange for the transfer or obligation and the debtor was<br>insolvent at that time or the debtor became insolvent as a result of the transfer or<br>obligation.2.A transfer made by a debtor is fraudulent as to a creditor whose claim arose before<br>the transfer was made if the transfer was made to an insider for an antecedent debt,<br>the debtor was insolvent at that time, and the insider had reasonable cause to<br>believe that the debtor was insolvent.13-02.1-06. When transfer is made or obligation is incurred. For the purposes of thischapter:1.A transfer is made with respect to an asset that is real property other than a fixture,<br>but including the interest of a seller or purchaser under a contract for the sale of the<br>asset, when the transfer is so far perfected that a good-faith purchaser of the asset<br>from the debtor against whom applicable law permits the transfer to be perfected<br>cannot acquire an interest in the asset that is superior to the interest of the<br>transferee. A transfer is made with respect to an asset that is not real property or<br>that is a fixture, when the transfer is so far perfected that a creditor on a simple<br>contract cannot acquire a judicial lien otherwise than under this chapter that is<br>superior to the interest of the transferee.2.If applicable law permits the transfer to be perfected as provided in subsection 1 and<br>the transfer is not so perfected before the commencement of an action for relief<br>under this chapter, the transfer is deemed to have been made immediately before<br>the commencement of the action.3.If applicable law does not permit the transfer to be perfected as provided in<br>subsection 1, the transfer is made when it becomes effective between the debtor<br>and the transferee.4.A transfer is not made until the debtor has acquired rights in the asset transferred.5.An oral obligation is incurred when it becomes effective between the parties. An<br>obligation evidenced by a writing is incurred when the writing executed by the obligor<br>is delivered to or for the benefit of the obligee.13-02.1-07. Remedies of creditors.1.In an action for relief against a transfer or obligation under this chapter, a creditor,<br>subject to the limitations in section 13-02.1-08, may obtain:a.Avoidance of the transfer or obligation to the extent necessary to satisfy the<br>creditor's claim;b.Attachment or other provisional remedy against the asset transferred or other<br>property of the transferee in accordance with the procedure prescribed by<br>chapter 32-08.1; orc.Subject to applicable principles of equity and in accordance with applicable<br>rules of civil procedure, an injunction against further disposition by the debtor orPage No. 4a transferee, or both, of the asset transferred or of other property, an<br>appointment of a receiver to take charge of the asset transferred or of other<br>property of the transferee, or any other relief the circumstances may require.2.If a creditor has obtained a judgment on a claim against the debtor, the creditor, if<br>the court so orders, may levy execution on the asset transferred or its proceeds.13-02.1-08. Defenses - Liability - Protection of transferee.1.A transfer or obligation is not voidable under subdivision a of subsection 1 of section<br>13-02.1-04 against a person who took in good faith and for a reasonably equivalent<br>value or against any subsequent transferee or obligee.2.Except as otherwise provided in this section, to the extent a transfer is voidable in an<br>action by a creditor under subdivision a of subsection 1 of section 13-02.1-07, the<br>creditor may recover judgment for the value of the asset transferred, as adjusted<br>under subsection 3, or the amount necessary to satisfy the creditor's claim,<br>whichever is less. The judgment may be entered against the first transferee of the<br>asset or the person for whose benefit the transfer was made or any subsequent<br>transferee other than a good-faith transferee who took for value or from any<br>subsequent transferee.3.If the judgment under subsection 2 is based upon the value of the asset transferred,<br>the judgment must be for an amount equal to the value of the asset at the time of the<br>transfer, subject to adjustment as the equities may require.4.Notwithstanding voidability of a transfer or an obligation under this chapter, a<br>good-faith transferee or obligee is entitled, to the extent of the value given the debtor<br>for the transfer or obligation, to a lien on or a right to retain any interest in the asset<br>transferred, enforcement of any obligation incurred, or a reduction in the amount of<br>the liability on the judgment.5.A transfer is not voidable under subdivision b of subsection 1 of section 13-02.1-04<br>or section 13-02.1-05 if the transfer results from termination of a lease upon default<br>by the debtor when the termination is pursuant to the lease and applicable law or<br>enforcement of a security interest in compliance with chapter 41-09.6.A transfer is not voidable under subsection 2 of section 13-02.1-05:a.To the extent the insider gave new value to or for the benefit of the debtor after<br>the transfer was made unless the new value was secured by a valid lien;b.If made in the ordinary course of business or financial affairs of the debtor and<br>the insider; orc.If made pursuant to a good-faith effort to rehabilitate the debtor and the transfer<br>secured present value given for that purpose as well as an antecedent debt of<br>the debtor.13-02.1-09. Extinguishment of claim for relief. A claim for relief with respect to afraudulent transfer or obligation under this chapter is extinguished unless action is brought:1.Under subdivision a of subsection 1 of section 13-02.1-04, within four years after the<br>transfer was made or the obligation was incurred or, if later, within one year after the<br>transfer or obligation was or could reasonably have been discovered by the<br>claimant;Page No. 52.Under subdivision b of subsection 1 of section 13-02.1-04 or subsection 1 of section<br>13-02.1-05, within four years after the transfer was made or the obligation was<br>incurred; or3.Under subsection 2 of section 13-02.1-05, within one year after the transfer was<br>made or the obligation was incurred.13-02.1-10.Supplementary provisions.Unless displaced by the provisions of thischapter, the principles of law and equity, including the law merchant and the law relating to<br>principal and agent, estoppel, laches, fraud, misrepresentation, duress, coercion, mistake,<br>insolvency, or other validating or invalidating cause, supplement their provisions.Page No. 6Document Outlinechapter 13-02.1 uniform fraudulent transfer act

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