An Act relative to the uniform voidable transactions act
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▸SECTION 1
Chapter 109A of the General Laws is hereby amended by striking out section 1, as appearing in the 2022 Official Edition, and inserting in place thereof the following section:-
▸SECTION 1
This chapter may be cited as the Uniform Voidable Transactions Act.
▸SECTION 2
Section 2 of said chapter 109A, as so appearing, is hereby amended by inserting, in line 17, after the word “sole” the following word:- discretionary.
▸SECTION 3
Said section 2 of said chapter 109A, as so appearing, is hereby further amended by inserting after the definition of “debtor” the following definition:-
“Electronic”, relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic or similar capabilities.
▸SECTION 4
Said section 2 of said chapter 109A, as so appearing, is hereby further amended by striking out the definition of “person” and inserting in place thereof the following 2 definitions:-
“Organization”, a person other than an individual.
“Person”, 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.
▸SECTION 5
Said section 2 of said chapter 109A, as so appearing, is hereby further amended by inserting after the definition of “property” the following definition:-
“Record”, information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.
▸SECTION 6
Said section 2 of said chapter 109A, as so appearing, is hereby further amended by inserting after the definition of “relative” the following definition:-
“Sign”, 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.
▸SECTION 7
Said section 2 of said chapter 109A, as so appearing, is hereby further amended by inserting, in line 82, after the word “lease,” the following word:- license.
▸SECTION 8
Said chapter 109A is hereby amended by striking out section 3, as so appearing, and inserting in place thereof the following section:-
▸SECTION 3
(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 shall not include property that has been transferred, concealed, or removed with intent to hinder, delay, or defraud creditors or that has been transferred in a manner making the transfer voidable under this chapter.
(d) Debts under this section shall not include an obligation to the extent it is secured by a valid lien on property of the debtor not included as an asset.
▸SECTION 9
Section 5 of said chapter 109A, as so appearing, is hereby amended by striking out, in line 2, the word “fraudulent” and inserting in place thereof the following word:-voidable.
▸SECTION 10
Said section 5 of said chapter 109A, as so appearing, is hereby further amended by striking out, in line 13, the words “he would incur, debts beyond his” and inserting in place thereof the following words:- the debtor would incur, debts beyond the debtor’s.
▸SECTION 11
Said section 5 of said chapter 109A, as so appearing, is hereby further amended by striking out, in line 34, the word “who” and inserting in place thereof the following word:- that.
▸SECTION 12
Said section 5 of said chapter 109A, as so appearing, is hereby further amended by inserting after subsection (b) the following subsection:-
(c) A creditor making a claim for relief under subsection (a) has the burden of proving the elements of the claim for relief by a preponderance of the evidence.
▸SECTION 13
Section 6 of said chapter 109A, as so appearing, is hereby amended by striking out, in lines 2 and 8, the word “fraudulent” each time it appears and inserting in place thereof, in each instance, the following word:- “voidable”.
▸SECTION 14
Said section 6 of said chapter 109A, as so appearing, is hereby further amended by inserting after subsection (b) the following subsection:-
(c) Subject to subsection (b) of section 3, a creditor making a claim for relief under subsection (a) or (b) has the burden of proving the elements of the claim for relief by a preponderance of the evidence.
▸SECTION 15
Section 7 of said chapter 109A, as so appearing, is hereby amended by striking out, in line 7, the word “whom” and inserting in place thereof the following word:-which.
▸SECTION 16
Said section 7 of said chapter 109A, as so appearing, is hereby further amended by inserting, in line 23, after the word “transferred;” the following word:- and.
▸SECTION 17
Said section 7 of said chapter 109A, as so appearing, is hereby further amended by striking out, in line 26, the words “writing, when the writing executed” and inserting in place thereof the following words:- record, when the record signed.
▸SECTION 18
Section 8 of said chapter 109A, as so appearing, is hereby amended by striking out paragraph (2) of subsection (a) and inserting in place thereof the following paragraph:-
(2) an attachment or other provisional remedy against the asset transferred or other property of the transferee if available under applicable law; and
▸SECTION 19
Said section 8 of said chapter 109A, as so appearing, is hereby further amended by striking out, in line 13, the word “procedure,” and inserting in place thereof the word:- procedure:
▸SECTION 20
Said chapter 109A is hereby amended by striking out section 9, as so appearing, and inserting in place thereof the following section:-
▸SECTION 9
(a) A transfer or obligation is not voidable under paragraph (1) of subsection (a) of section 5 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 (1) of subsection (a) of section 8, 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 subsection (c), or the amount necessary to satisfy 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).
(2) Recovery pursuant to paragraph (1) of subsection (a) or (b) of section 8 of or from the asset transferred or its proceeds, by levy or otherwise, is available only against a person described in clause (i) or (ii) of paragraph (1).
(c) If the judgment under subsection (b) is based upon the value of the asset transferred, the judgment shall 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 chapter, 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 transferred;
(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 (2) of subsection (a) of section 5 or section 6 if the transfer results from:
(1) termination of a lease upon default by the debtor when the termination is pursuant to the lease and applicable law; or
(2) enforcement of a security interest in compliance with Article 9 of chapter 106, other than acceptance of collateral in full or partial satisfaction of the obligation it secures.
(f) A transfer is not voidable under subsection (b) of section 6:
(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 subsection (a), (d), (e) or (f) has the burden of proving the applicability of that subsection.
(2) Except as otherwise provided in paragraphs (3) and (4), the creditor has the burden of proving each applicable element of subsection (b) or (c).
(3) The transferee has the burden of proving the applicability to the transferee of clause (A) or (B) of clause (ii) of paragraph 1 of subsection (b).
(4) A party that seeks adjustment under subsection (c) has the burden of proving the adjustment.
(h) The standard of proof required to establish matters referred to in this section is by a preponderance of the evidence.
▸SECTION 21
Section 10 of said chapter 109A, as so appearing, is hereby amended by striking out, in line 1, the words “A cause of action with respect to a fraudulent” and inserting in place thereof the following words:- A claim for relief with respect to a.
▸SECTION 22
Said section 10 of said chapter 109A, as so appearing, is hereby further amended by striking out, in lines 4, 6, 9 and 11, the word “within” each time it appears and inserting in place thereof, in each instance, the following words:- not later than.
▸SECTION 23
Said chapter 109A is hereby amended by striking out sections 11 and 12, as so appearing, and inserting in place thereof the following 2 sections:-
▸SECTION 11
(a) In this section, the following rules determine a debtor’s location:
(1) A debtor who is an individual is located at the individual’s principal residence.
(2) A debtor that is an organization and has only one place of business 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 principal place of business.
(b) A claim for relief under this chapter 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.
▸SECTION 12
Unless otherwise required by the provisions of this chapter, 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, shall supplement its provisions.
▸SECTION 24
Said chapter 109A is hereby amended by inserting after section 13, as so appearing, the following 3 sections:-
▸SECTION 14
This chapter shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this chapter among states which enact it.
▸SECTION 15
This chapter modifies, limits or supersedes the Electronic 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).
▸SECTION 16
The official comments to the Uniform Voidable Transactions Act, as added by the Uniform Law Commission in 2014 with the adoption of the changes to the Uniform Fraudulent Transfer Act, are not part of this act and may or may not reflect current Massachusetts law.
▸SECTION 25
This Act: (a) applies to a transfer made or obligation incurred on or after the effective date of the amendments; (b) does not apply to a transfer made or obligation incurred before the effective date of the amendments; and (c) does not apply to a right of action that has accrued before the effective date of the amendments. A transfer is made and an obligation is incurred at the time provided in section 6 of chapter 109A.
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SECTION 1. Chapter 109A of the General Laws is hereby amended by striking out section 1, as appearing in the 2022 Official Edition, and inserting in place thereof the following section:-
Section 1. This chapter may be cited as the Uniform Voidable Transactions Act.
SECTION 2. Section 2 of said chapter 109A, as so appearing, is hereby amended by inserting, in line 17, after the word “sole” the following word:- discretionary.
SECTION 3. Said section 2 of said chapter 109A, as so appearing, is hereby further amended by inserting after the definition of “debtor” the following definition:-
“Electronic”, relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic or similar capabilities.
SECTION 4. Said section 2 of said chapter 109A, as so appearing, is hereby further amended by striking out the definition of “person” and inserting in place thereof the following 2 definitions:-
“Organization”, a person other than an individual.
“Person”, 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.
SECTION 5. Said section 2 of said chapter 109A, as so appearing, is hereby further amended by inserting after the definition of “property” the following definition:-
“Record”, information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.
SECTION 6. Said section 2 of said chapter 109A, as so appearing, is hereby further amended by inserting after the definition of “relative” the following definition:-
“Sign”, 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.
SECTION 7. Said section 2 of said chapter 109A, as so appearing, is hereby further amended by inserting, in line 82, after the word “lease,” the following word:- license.
SECTION 8. Said chapter 109A is hereby amended by striking out section 3, as so appearing, and inserting in place thereof the following section:-
Section 3. (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 shall not include property that has been transferred, concealed, or removed with intent to hinder, delay, or defraud creditors or that has been transferred in a manner making the transfer voidable under this chapter.
(d) Debts under this section shall not include an obligation to the extent it is secured by a valid lien on property of the debtor not included as an asset.
SECTION 9. Section 5 of said chapter 109A, as so appearing, is hereby amended by striking out, in line 2, the word “fraudulent” and inserting in place thereof the following word:-voidable.
SECTION 10. Said section 5 of said chapter 109A, as so appearing, is hereby further amended by striking out, in line 13, the words “he would incur, debts beyond his” and inserting in place thereof the following words:- the debtor would incur, debts beyond the debtor’s.
SECTION 11. Said section 5 of said chapter 109A, as so appearing, is hereby further amended by striking out, in line 34, the word “who” and inserting in place thereof the following word:- that.
SECTION 12. Said section 5 of said chapter 109A, as so appearing, is hereby further amended by inserting after subsection (b) the following subsection:-
(c) A creditor making a claim for relief under subsection (a) has the burden of proving the elements of the claim for relief by a preponderance of the evidence.
SECTION 13. Section 6 of said chapter 109A, as so appearing, is hereby amended by striking out, in lines 2 and 8, the word “fraudulent” each time it appears and inserting in place thereof, in each instance, the following word:- “voidable”.
SECTION 14. Said section 6 of said chapter 109A, as so appearing, is hereby further amended by inserting after subsection (b) the following subsection:-
(c) Subject to subsection (b) of section 3, a creditor making a claim for relief under subsection (a) or (b) has the burden of proving the elements of the claim for relief by a preponderance of the evidence.
SECTION 15. Section 7 of said chapter 109A, as so appearing, is hereby amended by striking out, in line 7, the word “whom” and inserting in place thereof the following word:-which.
SECTION 16. Said section 7 of said chapter 109A, as so appearing, is hereby further amended by inserting, in line 23, after the word “transferred;” the following word:- and.
SECTION 17. Said section 7 of said chapter 109A, as so appearing, is hereby further amended by striking out, in line 26, the words “writing, when the writing executed” and inserting in place thereof the following words:- record, when the record signed.
SECTION 18. Section 8 of said chapter 109A, as so appearing, is hereby amended by striking out paragraph (2) of subsection (a) and inserting in place thereof the following paragraph:-
(2) an attachment or other provisional remedy against the asset transferred or other property of the transferee if available under applicable law; and
SECTION 19. Said section 8 of said chapter 109A, as so appearing, is hereby further amended by striking out, in line 13, the word “procedure,” and inserting in place thereof the word:- procedure:
SECTION 20. Said chapter 109A is hereby amended by striking out section 9, as so appearing, and inserting in place thereof the following section:-
Section 9. (a) A transfer or obligation is not voidable under paragraph (1) of subsection (a) of section 5 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 (1) of subsection (a) of section 8, 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 subsection (c), or the amount necessary to satisfy 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).
(2) Recovery pursuant to paragraph (1) of subsection (a) or (b) of section 8 of or from the asset transferred or its proceeds, by levy or otherwise, is available only against a person described in clause (i) or (ii) of paragraph (1).
(c) If the judgment under subsection (b) is based upon the value of the asset transferred, the judgment shall 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 chapter, 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 transferred;
(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 (2) of subsection (a) of section 5 or section 6 if the transfer results from:
(1) termination of a lease upon default by the debtor when the termination is pursuant to the lease and applicable law; or
(2) enforcement of a security interest in compliance with Article 9 of chapter 106, other than acceptance of collateral in full or partial satisfaction of the obligation it secures.
(f) A transfer is not voidable under subsection (b) of section 6:
(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 subsection (a), (d), (e) or (f) has the burden of proving the applicability of that subsection.
(2) Except as otherwise provided in paragraphs (3) and (4), the creditor has the burden of proving each applicable element of subsection (b) or (c).
(3) The transferee has the burden of proving the applicability to the transferee of clause (A) or (B) of clause (ii) of paragraph 1 of subsection (b).
(4) A party that seeks adjustment under subsection (c) has the burden of proving the adjustment.
(h) The standard of proof required to establish matters referred to in this section is by a preponderance of the evidence.
SECTION 21. Section 10 of said chapter 109A, as so appearing, is hereby amended by striking out, in line 1, the words “A cause of action with respect to a fraudulent” and inserting in place thereof the following words:- A claim for relief with respect to a.
SECTION 22. Said section 10 of said chapter 109A, as so appearing, is hereby further amended by striking out, in lines 4, 6, 9 and 11, the word “within” each time it appears and inserting in place thereof, in each instance, the following words:- not later than.
SECTION 23. Said chapter 109A is hereby amended by striking out sections 11 and 12, as so appearing, and inserting in place thereof the following 2 sections:-
Section 11. (a) In this section, the following rules determine a debtor’s location:
(1) A debtor who is an individual is located at the individual’s principal residence.
(2) A debtor that is an organization and has only one place of business 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 principal place of business.
(b) A claim for relief under this chapter 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.
Section 12. Unless otherwise required by the provisions of this chapter, 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, shall supplement its provisions.
SECTION 24. Said chapter 109A is hereby amended by inserting after section 13, as so appearing, the following 3 sections:-
Section 14. This chapter shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this chapter among states which enact it.
Section 15. This chapter modifies, limits or supersedes the Electronic 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).
Section 16. The official comments to the Uniform Voidable Transactions Act, as added by the Uniform Law Commission in 2014 with the adoption of the changes to the Uniform Fraudulent Transfer Act, are not part of this act and may or may not reflect current Massachusetts law.
SECTION 25. This Act: (a) applies to a transfer made or obligation incurred on or after the effective date of the amendments; (b) does not apply to a transfer made or obligation incurred before the effective date of the amendments; and (c) does not apply to a right of action that has accrued before the effective date of the amendments. A transfer is made and an obligation is incurred at the time provided in section 6 of chapter 109A.