Fraudulent Conveyance

Last Updated: Jun 7, 2019

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In simple terms, a fraudulent conveyance (or fraudulent transfer) is a transfer of property made, or a debt incurred, with the actual intent to defraud creditors (i.e., an actual fraudulent transfer) or by an insolvent company for less than reasonably equivalent value (i.e., a constructively fraudulent transfer). A fraudulent transfer is subject to avoidance, meaning the property so transferred (or its value) can be clawed back and the obligation so incurred can be set aside. The bankruptcy code contains a fraudulent transfer law that can be used in bankruptcy cases and, in addition, each state has its own fraudulent transfer law that can be used both inside and outside of bankruptcy. The fraudulent transfer analysis is extremely fact sensitive.