What is a Fraudulent Conveyance?

For more than three decades, Norman Kinel has gained valuable skills in the field of bankruptcy, litigating numerous cases on behalf of his clients. In his current duties, he serves as a partner in the New York office of Squire Patton Boggs LLP and also serves as the National Chair of Creditors’ Committee Practice Group. During the course of his career, Norman Kinel has gained extensive experience in various legal areas, including fraudulent conveyances.

A fraudulent conveyance refers to the transfer of property to another individual in order to avoid payment of a debt or potential debt, to ensure the property is out of creditors’ reach, especially during bankruptcy proceedings or when they are just about to begin. Fraudulent conveyance can involve a company or an individual, whereby property is transferred to family, friends, or other third parties.

Under the Uniform Fraudulent Transfer Act (UFTA), there are various factors that determine if a fraudulent conveyance occurred. This includes whether the transfer was made to an insider such as a family member and whether the debtor retained possession or control of the property after the transfer. Other considerations include if a debtor had been threatened with legal action before the property transfer was made, if the debtor received payment for the transfer of assets, and whether they transferred a substantial portion or all of their assets.