Last month, New York enacted the Uniform Voidable Transactions Act (“UVTA”)[1], which seeks to modernize the state’s fraudulent conveyance law.
Since its introduction by the Uniform Law Commission in 2014, the UVTA has now been adopted by 21 states.[2] The UVTA was originally drafted by the Uniform Law Commission as an amendment to the 1984 Uniform Fraudulent Transfer Act (“UFTA”); New York was one of only seven states that did not adopt the original UFTA.[3]
Under the Bankruptcy Code, filing a bankruptcy petition automatically halts efforts to collect pre-petition debts from the debtor outside of bankruptcy.
This is the "automatic stay," and it is a command, not a suggestion. If a creditor wants to continue a lawsuit against a debtor outside of bankruptcy, repossess collateral, terminate a lease, set off debts, or pursue other collection efforts, it first must obtain stay relief from the bankruptcy court.
A real estate developer faced foreclosure and the loss of a large and very visible condominium project in Manhattan. A prominent New York City real estate investor, Philip Pilevsky, with help from his family members tried to rescue the developer by implementing a fairly obvious and perfectly legal technique to delay the foreclosure by almost a year.
Section 546(e) of the Bankruptcy Code is a safe harbor provision that establishes that a trustee or debtor-in-possession may not avoid a transfer “by or to... a financial institution.. in connection with a securities contract” other than under an intentional fraudulent conveyance theory. On December 19, 2019, the Second Circuit in Note Holders v.
Establishing the judicial estoppel defense against a bankrupt plaintiff will be harder in the Eleventh Circuit following Smith v. Haynes & Haynes P.C., 940 F.3d 635 (11th Cir. 2019).
Mark your calendars! The New Jersey Department of the Treasury recently announced a new one-time program authorized by recent legislation aimed at improving government-to-business interactions.
The Streamlined Business Reinstatement and Dissolution Program offers businesses that are currently in “revoked status” – due to not having complied with the state’s administrative reporting requirements – an expedited path to reinstatement or dissolution, both notoriously time-consuming and expensive processes.
The Bottom Line
The Small Business Reorganization Act of 2019 ("SBRA"), the Honoring American Veterans in Extreme Need ("HAVEN") Act, and the Family Farmer Relief Act were enacted into law on August 23, 2019. This alert summarizes these changes to the law and when they take effect. For a fuller discussion of the SBRA, please see Joe Ammar's recent article in the Michigan Bankruptcy Journal.
On December 6, 2019, the governor of New York signed into law the New York Uniform Voidable Transactions Act (“NYUVTA”). N.Y. DEBT. & CRED. §§ 270-281. Until the occurrence of that event, New York had adhered for 95 years to the Uniform Fraudulent Conveyance Act (“NYUFCA”) and had refrained from replacing it with the Uniform Fraudulent Transfer Act (“UFTA”), which was adopted by virtually all of the other states as a replacement of the Uniform Fraudulent Conveyance Act (“UFCA”).
The United States District Court for the District of Delaware recently affirmed a Delaware bankruptcy court case that held that the mutuality requirement of section 553(a)1The case declined to find mutuality in a triangular setoff between the debtor, a parent entity that owed the debtor money, and that entity’s subsidiary, which was a creditor.2