2017 NYS Legislative Agenda: Enact the Uniform Voidable Transactions Act
Enact the Uniform Voidable Transactions Act, which would modernize New York’s laws related to fraudulent conveyances
The City Bar supports enactment of the Uniform Voidable Transactions Act (the “UVTA”), promulgated by the Uniform Law Commissioners in 2014. The UVTA would replace the current provisions in Article 10 (§§ 270-281) of the Debtor and Creditor Law, which are based on the Uniform Fraudulent Conveyance Act (the “UFCA”), which was enacted in New York in 1925. The UVTA provides remedies available to creditors injured by what traditionally have been referred to as “intentional” or “constructive” fraudulent conveyances or transfers—property transferred or obligations incurred (a) by a debtor with actual intent to hinder, delay or defraud its creditors or (b) for less than fair consideration by an insolvent or undercapitalized debtor. New York’s Fraudulent Conveyance Law has not been updated significantly in 90 years and is based on a “model” statute promulgated in 1918. Only New York and Maryland retain the UFCA. The proposed legislation would modernize the New York statute to reflect 100 years of developments in commercial law, legal terminology and practice and resolve many open questions under the UFCA. It would also bring New York’s law in line with Federal law and the law of most states; current inconsistencies lead to confusion and disparate results depending on what law is applied while also fueling costly litigation over choice-of-law issues.
