It considered that questions of fact precluded a summary decision on the third, fourth, fifth and sixth grounds of appeal. The court found that although Sarfati proved that the transfers in question were made without fair consideration and in bad faith – Frank testified that he transferred the assets to his wife for $10.00 to escape future creditors – Sarfati had failed to prove the other elements of sections 273, 273-a, 274 and 275 of the DCL. Slip Op. to **7-9. In this context, the tribunal found that Sarfati had failed to prove that “Frank Mary (i) made a particular transfer during his insolvency, or that the disputed transfer rendered him insolvent, (ii) while Frank was a party to a dispute with the plaintiff or after judgment against him was rendered, (iii) while Frank was conducting or intended to enter into a business transaction, for which its remaining assets would represent unreasonably small capital. or (iv) at a time when Frank “intended or believed” that he would incur debts in excess of his creditworthiness when due. Slip op to *9. Like DCL § 276, NYUVTA § 273(a) provides for the cancellation of transfers or obligations entered into if the defendant or debtor intends to “obstruct, delay or defraud”. NYUVTA § 273(a)(1). Where “fraud badges” have often been identified by courts under the DCL, Section 273(b) of NYUVTA 11 lists non-exclusive “fraud badges” that courts may consider in determining intent. These factors include whether the transfer was made to an insider, whether the transfer was concealed, whether the debtor was prosecuted and whether the debtor absconded.
In applying this standard to shift the burden of summary judgment to proceedings under the DCL, New York courts have long held that once the plaintiff concludes that a transfer was made without consideration, the initial burden of establishing solvency rests with the assignor. Whether the transfer in question rendered the debtor insolvent and whether reasonable consideration was paid are generally questions of fact to be resolved in the circumstances of the case and, in general, the burden of proving these elements lies with the party challenging the transfer. However, if a transfer has taken place without consideration, the courts will recognize a rebuttable presumption of insolvency and fraudulent transfer, and it is then up to the purchaser to overcome this presumption. Another significant change to the law is the creation of an insider avoidance claim, which is similar to an insider preference for prior debt that is voidable under the Bankruptcy Act. Under Section 274(b) of NYUVTA, “a transfer made by a debtor is voidable for a creditor whose claim arose before the transfer if the transfer was made to an insider for a prior debt, if the debtor was insolvent at that time, and the insider had reasonable grounds to believe that the debtor was insolvent.” A claim under this section must be made within one year of the transfer. In particular, NYUVTA does not reverse the burden of proof for bankruptcy – the creditor must prove bankruptcy, as well as any element necessary for an insider challenge claim, by weighing the evidence. In the context of bankruptcy, on the other hand, the debtor`s insolvency is presumed. Article 273 of the DCL provides that any transfer or obligation of a person who becomes or becomes insolvent is fraudulent against creditors, regardless of his actual will, if the transfer is made or if the obligation is contracted without adequate consideration. Articles 274 and 275 of the DCL further provide: As the judgment was not enforced, the plaintiff brought an action on 10 July 2010.
According to the applicant, the comparison in the file was nothing more than a `trick`. The plaintiff alleged that the defendants conducted their business with the premises without regard to business formalities or proper documentation or accounting controls, and created layers of “single-use LLCs” with which they fraudulently removed assets in order to withdraw from creditors such as the plaintiff. Whose rules of law is often a very controversial issue. Section 279(b) of NYUVTA brings clarity to the issue. According to this article, a right of appeal is “governed by the local law of the jurisdiction in which the debtor is located at the time of the transfer or obligation”. If the debtor is a company, article 279 (a) provides that the applicable law is its place of business if it has only one, or its registered office if there is more than one place of business. Article 276 of the DCL, unlike Articles 273 and 275, concerns actual fraud as opposed to implied fraud and does not require proof of unfair consideration or insolvency.