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A01853 Summary:

A01853 Actions:

A01853 Committee Votes:

Committee:JUDICIARY   Chair:Weinstein      
DATE:06/07/2017AYE/NAY:19/0  Action: Favorable refer to committee Codes        
Weinstein
Aye
Palumbo
Aye
Dinowitz
Aye
Montesano
Aye
Titus
Excused
Barclay
Aye
Lavine
Aye
Goodell
Aye
Zebrowski
Aye
Graf
Aye
Weprin
Aye
Lupinacci
Aye
Braunstein
Aye
Simotas
Excused
Quart
Aye
Titone
Aye
Buchwald
Aye
Steck
Aye
Seawright
Aye
Simon
Aye
Joyner
Aye

Committee:CODES   Chair:Lentol      
DATE:06/13/2017AYE/NAY:20/0  Action: Favorable refer to committee Rules        
Lentol
Aye
Graf
Aye
Schimminger
Aye
Giglio
Aye
Weinstein
Aye
McKevitt
Excused
Pretlow
Aye
Montesano
Aye
Cook
Aye
Ra
Aye
Cymbrowitz
Aye
Morinello
Aye
Titus
Aye
O'Donnell
Aye
Lavine
Aye
Perry
Aye
Zebrowski
Aye
Abinanti
Aye
Weprin
Aye
Mosley
Aye
Hevesi
Excused
Fahy
Aye

Committee:RULES   Chair:Heastie      
DATE:06/15/2017AYE/NAY:30/0  Action: Favorable         
Heastie
Aye
Kolb
Aye
Gottfried
Aye
Oaks
Aye
Lentol
Aye
Butler
Aye
Farrell
Aye
Crouch
Aye
Gantt
Aye
Finch
Aye
Nolan
Aye
Barclay
Aye
Weinstein
Aye
Raia
Aye
Hooper
Aye
Hawley
Aye
Ortiz
Aye
Pretlow
Aye
Cook
Excused
Glick
Aye
Morelle
Aye
Aubry
Aye
Englebright
Aye
Dinowitz
Aye
Colton
Aye
Magnarelli
Aye
Perry
Aye
Galef
Aye
Paulin
Aye
Titus
Aye
Peoples-Stokes
Aye

A01853 Floor Votes:

A01853 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
 submitted in accordance with Assembly Rule III, Sec 1(f)



 
BILL NUMBER: A1853A
 
SPONSOR: Weinstein

 
TITLE OF BILL:  An act to amend the debtor and creditor law, the civil
practice law and rules, the estates, powers and trusts law and the work-
ers' compensation law, in relation to enacting the "uniform voidable
transactions act"; and to repeal certain provisions of the debtor and
creditor law relating to fraudulent conveyances
 
 
PURPOSE OF BILL:
 
This bill would update the Debtor and Creditor Law by replacing the 1925
Fraudulent Conveyances Act with the Uniform Voidable Transactions Act.
This new law will make the system more efficient and cost effective, and
ensure greater consistency with federal bankruptcy law.
 
 
SUMMARY OF PROVISIONS OF BILL:
 
Section one of the bill provides that this act shall be known and may be
cited as the "Uniform Voidable Transactions Act."
 
Section two of the bill repeals Article 10 of the Debtor and Creditor
law ("Fraudulent Conveyances") and enacts a new Article 10 ("Uniform
Voidable Transactions Act"), which contains the following pieces:
 
Section 270 Definitions
 
Section 271 Insolvency
 
Section 272 Value
 
Section 273 Transfer or obligation voidable as to present or future
creditor
 
Section 274 Transfer or obligation voidable as to present creditor
 
Section 275 When transfer is made or obligation is incurred
 
Section 276 Remedies of creditor
 
Section 276-a - Attorneys fees in action or special proceeding to avoid
a transfer or obligation

Section 277 Defenses, liability, and protection of transferee or obligee
 
Section 278 Extinguishment of claim for relief
 
Section 279 Governing Law
 
Section 280 Supplementary provisions
 
Section 281 Uniformity of application and construction
 
Section 281-a Relation to electronic signatures in global and national
commerce act
 
Section three of the bill amends Section 5205(c)(5) of the CPLR to
update a reference to "fraudulent conveyances" so that it now refers to
"voidable transactions."
Section four of the bill amends Section 5519(g) of the CPLR to update a
reference to "fraudulent conveyances" so that it now refers to "voidable
transactions."
 
Section five of the bill amends Section 7-3.1(b)(4) of the EPTL to
update a reference to "fraudulent conveyances" so that it now refers to
"voidable transactions."
 
Section six of the bill updates a cross-reference to Section 273 of the
Debtor and Creditor Law so that it properly references the updated
Section 274(a) of the Debtor and Creditor Law.
 
 
JUSTIFICATION:
 
This bill would enact a needed update to New York's Debtor and Creditor
Law. New York's current Fraudulent Conveyances Act (Article 10) was
enacted in 1925, based on a proposal developed by the Uniform Law
Commissioners in 1918.
 
After enactment of the federal Bankruptcy Reform Act of 1978, the
Uniform Law Commissioners revisited this issue and in 1984 they submit-
ted an updated version entitled the Uniform Fraudulent Transfer Act.
While that legislation was adopted by almost every state, it was never
enacted in New York. Today, only New York and Maryland continue to oper-
ate under a 1920s-era law.
 
There have been several major developments since the enactment of New
York's current law in 1925, including the enactment of the federal bank-
ruptcy laws and the enactment of a Uniform Commercial Code. New York's
law is now inconsistent in many ways with federal bankruptcy laws and
the laws in most parts of the country.
 
This inconsistency, and the application of a number of outdated,
provisions, have added costs and complexity to the process, to the
detriment of creditors, debtors and recipients of transfers alike. In
addition, it has become increasingly noted that New York's outdated law
can have unintended consequences. For example, although certain property
is deemed by law to be exempt from creditors, there have been cases in
which the transfer of such exempt assets may be subject to New York's
existing fraudulent conveyances act, thereby allowing creditors to seize
assets that would otherwise be exempt.
 
This bill would adopt the Uniform Law Commission's 2014 revised version
of the Uniform Fraudulent Transfer Act, now known as the Uniform Voida-
ble Transfers Act. The 2014 revisions made a number of improvements to
the 1984 version, including changing and clarifying terminology (such as
referring to "voidable transfers" instead of the potentially misleading
phrase "fraudulent transfers"); clarifying the choice-of-law determi-
nation; improving provisions for determining insolvency; and clarifying
the burden of proof of each party.
 
This new act maintains the basic principles of New York's longstanding
law, but makes the law more consistent, predictable, efficient and cost
effective.
 
 
LEGISLATIVE HISTORY:
 
New bill, 2017.
 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
 
None.
 
 
EFFECTIVE DATE:
This act shall take effect 120 days after it shall have become law, and
shall apply to a transfer made or obligation incurred on or after such
effective date, but shall not apply to a transfer made or obligation
incurred before such effective date, nor shall it apply to a right of
action that has accrued before such effective date. For the foregoing
purposes, a transfer is made and an obligation is incurred at the time
provided in Section 275 of the Debtor and Creditor Law as added by
Section 2 of this Act.

A01853 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         1853--A
 
                               2017-2018 Regular Sessions
 
                   IN ASSEMBLY
 
                                    January 13, 2017
                                       ___________
 
        Introduced  by  M.  of  A.  WEINSTEIN  --  read once and referred to the
          Committee on Judiciary -- committee discharged, bill amended,  ordered
          reprinted as amended and recommitted to said committee
 
        AN  ACT to amend the debtor and creditor law, the civil practice law and
          rules, the estates, powers and trusts law  and  the  workers'  compen-
          sation law, in relation to enacting the "uniform voidable transactions
          act";  and to repeal certain provisions of the debtor and creditor law
          relating to fraudulent conveyances
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1.  Short  title. This act shall be known and may be cited as
     2  the "uniform voidable transactions act".
     3    § 2. Article 10 of the debtor and creditor law is REPEALED and  a  new
     4  article 10 is added to read as follows:
     5                                 ARTICLE 10
     6                      UNIFORM VOIDABLE TRANSACTIONS ACT
     7  Section 270.   Definitions.
     8          271.   Insolvency.
     9          272.   Value.
    10          273.   Transfer  or  obligation voidable as to present or future
    11                   creditor.
    12          274.   Transfer or obligation voidable as to present creditor.
    13          275.   When transfer is made or obligation is incurred.
    14          276.   Remedies of creditor.
    15          276-a.   Attorney's fees in action or special  proceeding  under
    16                   this article to avoid a transfer or obligation.
    17          277.   Defenses,  liability,  and  protection  of  transferee or
    18                   obligee.
    19          278.   Extinguishment of claim for relief.
    20          279.   Governing law.
    21          280.   Supplementary provisions.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD06162-02-7
        A. 1853--A                          2
 
     1          281. Uniformity of application and construction.
     2          281-a. Relation  to electronic signatures in global and national
     3                   commerce act.
     4    § 270. Definitions. As used in this article:
     5    (a) "Affiliate" means:
     6    (1) a person that directly or indirectly owns, controls or holds  with
     7  power  to vote, twenty percent or more of the outstanding voting securi-
     8  ties of the debtor, other than a person that holds the securities:
     9    (i) as a fiduciary or agent without sole discretionary power  to  vote
    10  the securities; or
    11    (ii)  solely to secure a debt, if the person has not in fact exercised
    12  the power to vote;
    13    (2) a corporation twenty percent or more of whose  outstanding  voting
    14  securities  are  directly  or  indirectly owned, controlled or held with
    15  power to vote, by the debtor or a person  that  directly  or  indirectly
    16  owns,  controls  or holds, with power to vote, twenty percent or more of
    17  the outstanding voting securities of the debtor,  other  than  a  person
    18  that holds the securities:
    19    (i)  as  a fiduciary or agent without sole discretionary power to vote
    20  the securities; or
    21    (ii) solely to secure a debt, if the person has not in fact  exercised
    22  the power to vote;
    23    (3) a person whose business is operated by the debtor under a lease or
    24  other  agreement,  or  a  person  substantially  all of whose assets are
    25  controlled by the debtor; or
    26    (4) a person that operates the debtor's  business  under  a  lease  or
    27  other agreement or controls substantially all of the debtor's assets.
    28    (b) "Asset" means property of a debtor, but the term does not include:
    29    (1) property to the extent it is encumbered by a valid lien;
    30    (2) property to the extent it is generally exempt under non-bankruptcy
    31  law; or
    32    (3)  an  interest  in  property held in tenancy by the entirety to the
    33  extent it is not subject to  process  by  a  creditor  holding  a  claim
    34  against only one tenant.
    35    (c)  "Claim",  except  as used in "claim for relief", means a right to
    36  payment, whether or not the right is reduced  to  judgment,  liquidated,
    37  unliquidated,  fixed,  contingent,  matured, unmatured, disputed, undis-
    38  puted, legal, equitable, secured or unsecured.
    39    (d) "Creditor" means a person that has a claim.
    40    (e) "Debt" means liability on a claim.
    41    (f) "Debtor" means a person that is liable on a claim.
    42    (g) "Electronic"  means  relating  to  technology  having  electrical,
    43  digital,  magnetic,  wireless, optical, electromagnetic or similar capa-
    44  bilities.
    45    (h) "Insider" includes:
    46    (1) if the debtor is an individual:
    47    (i) a relative of the debtor or of a general partner of the debtor;
    48    (ii) a partnership in which the debtor is a general partner;
    49    (iii) a general partner in a  partnership  described  in  subparagraph
    50  (ii) of this paragraph; or
    51    (iv)  a  corporation  of  which  the debtor is a director, officer, or
    52  person in control;
    53    (2) if the debtor is a corporation:
    54    (i) a director of the debtor;
    55    (ii) an officer of the debtor;
    56    (iii) a person in control of the debtor;
        A. 1853--A                          3
 
     1    (iv) a partnership in which the debtor is a general partner;
     2    (v)  a general partner in a partnership described in subparagraph (iv)
     3  of this paragraph; or
     4    (vi) a relative of a general partner, director, officer or  person  in
     5  control of the debtor;
     6    (3) if the debtor is a partnership:
     7    (i) a general partner in the debtor;
     8    (ii)  a  relative  of  a general partner in, a general partner of or a
     9  person in control of the debtor;
    10    (iii) another partnership in which the debtor is a general partner;
    11    (iv) a general partner in  a  partnership  described  in  subparagraph
    12  (iii) of this paragraph; or
    13    (v) a person in control of the debtor;
    14    (4)  an  affiliate,  or an insider of an affiliate as if the affiliate
    15  were the debtor; and
    16    (5) a managing agent of the debtor.
    17    (i) "Lien" means a charge against or an interest in property to secure
    18  payment of a debt or performance of an obligation, and includes a  secu-
    19  rity interest created by agreement, a judicial lien obtained by legal or
    20  equitable  process  or  proceedings,  a  common-law lien, or a statutory
    21  lien.
    22    (j) "Organization" means a person other than an individual.
    23    (k) "Person" means an individual,  estate,  partnership,  association,
    24  trust,  business  or nonprofit entity, public corporation, government or
    25  governmental subdivision, agency or instrumentality, or other  legal  or
    26  commercial entity.
    27    (l) "Property" means anything that may be the subject of ownership.
    28    (m)  "Record" means information that is inscribed on a tangible medium
    29  or that is stored in an electronic or other medium and is retrievable in
    30  perceivable form.
    31    (n) "Relative" means an individual related by consanguinity within the
    32  third degree as determined by the common law, a spouse or an  individual
    33  related  to  a  spouse  within  the  third  degree as so determined, and
    34  includes an individual in an  adoptive  relationship  within  the  third
    35  degree.
    36    (o)  "Sign"  means,  with  present  intent  to authenticate or adopt a
    37  record:
    38    (i) to execute or adopt a tangible symbol; or
    39    (ii) to attach to or logically associate with the record an electronic
    40  symbol, sound, or process.
    41    (p) "Transfer" means every  mode,  direct  or  indirect,  absolute  or
    42  conditional,  voluntary  or involuntary, of disposing of or parting with
    43  an asset or an interest in an asset,  and  includes  payment  of  money,
    44  release, lease, license, and creation of a lien or other encumbrance.
    45    (q)  "Valid lien" means a lien that is effective against the holder of
    46  a judicial lien subsequently obtained by legal or equitable  process  or
    47  proceedings.
    48    § 271. Insolvency.  (a) A debtor is insolvent if, at a fair valuation,
    49  the  sum  of  the debtor's debts is greater than the sum of the debtor's
    50  assets.
    51    (b) A debtor that is generally not paying the debtor's debts  as  they
    52  become  due other than as a result of a bona fide dispute is presumed to
    53  be insolvent.  The presumption imposes on the party  against  which  the
    54  presumption  is  directed the burden of proving that the nonexistence of
    55  insolvency is more probable than its existence.
        A. 1853--A                          4
 
     1    (c) Assets under this section do not include property  that  has  been
     2  transferred,  concealed  or  removed  with  intent  to  hinder, delay or
     3  defraud creditors, or that has been transferred in a manner  making  the
     4  transfer voidable under this article.
     5    (d)  Debts  under  this  section  do  not include an obligation to the
     6  extent it is secured by a valid lien  on  property  of  the  debtor  not
     7  included as an asset.
     8    §  272. Value.  (a) Value is given for a transfer or an obligation if,
     9  in exchange for the transfer or obligation, property is  transferred  or
    10  an  antecedent  debt is secured or satisfied, but value does not include
    11  an unperformed promise made otherwise than in the ordinary course of the
    12  promisor's business to furnish support to the debtor or another person.
    13    (b) For the purposes of paragraph two of subdivision  (a)  of  section
    14  two  hundred  seventy-three and section two hundred seventy-four of this
    15  article, a person gives a reasonably  equivalent  value  if  the  person
    16  acquires  an  interest of the debtor in an asset pursuant to a regularly
    17  conducted, noncollusive foreclosure sale or execution of a power of sale
    18  for the acquisition or disposition of the interest of  the  debtor  upon
    19  default under a mortgage, deed of trust, or security agreement.
    20    (c)  A  transfer is made for present value if the exchange between the
    21  debtor and the transferee is intended by them to be contemporaneous  and
    22  is in fact substantially contemporaneous.
    23    §  273. Transfer or obligation voidable as to present or future credi-
    24  tor.  (a) A transfer made or obligation incurred by a debtor is voidable
    25  as to a creditor, whether the creditor's claim arose before or after the
    26  transfer was made or the obligation was incurred, if the debtor made the
    27  transfer or incurred the obligation:
    28    (1) with actual intent to hinder, delay or defraud any creditor of the
    29  debtor; or
    30    (2) without receiving a reasonably equivalent value  in  exchange  for
    31  the transfer or obligation, and the debtor:
    32    (i)  was engaged or was about to engage in a business or a transaction
    33  for which the remaining assets of the debtor were unreasonably small  in
    34  relation to the business or transaction; or
    35    (ii) intended to incur, or believed or reasonably should have believed
    36  that the debtor would incur, debts beyond the debtor's ability to pay as
    37  they became due.
    38    (b)  In  determining  actual intent under paragraph one of subdivision
    39  (a) of this section, consideration may be given, among other factors, to
    40  whether:
    41    (1) the transfer or obligation was to an insider;
    42    (2) the debtor retained possession or control of the  property  trans-
    43  ferred after the transfer;
    44    (3) the transfer or obligation was disclosed or concealed;
    45    (4)  before  the  transfer  was  made  or obligation was incurred, the
    46  debtor had been sued or threatened with suit;
    47    (5) the transfer was of substantially all the debtor's assets;
    48    (6) the debtor absconded;
    49    (7) the debtor removed or concealed assets;
    50    (8) the value of the consideration received by the debtor was  reason-
    51  ably  equivalent  to the value of the asset transferred or the amount of
    52  the obligation incurred;
    53    (9) the debtor was insolvent or became  insolvent  shortly  after  the
    54  transfer was made or the obligation was incurred;
    55    (10)  the transfer occurred shortly before or shortly after a substan-
    56  tial debt was incurred; and
        A. 1853--A                          5
 
     1    (11) the debtor transferred the essential assets of the business to  a
     2  lienor that transferred the assets to an insider of the debtor.
     3    (c) A creditor making a claim for relief under subdivision (a) of this
     4  section  has  the burden of proving the elements of the claim for relief
     5  by a preponderance of the evidence.
     6    § 274. Transfer or obligation voidable as to present creditor.  (a)  A
     7  transfer  made  or  obligation  incurred by a debtor is voidable as to a
     8  creditor whose claim arose before the transfer was  made  or  the  obli-
     9  gation  was  incurred  if  the  debtor made the transfer or incurred the
    10  obligation without receiving a reasonably equivalent value  in  exchange
    11  for the transfer or obligation and the debtor was insolvent at that time
    12  or  the  debtor  became  insolvent  as a result of the transfer or obli-
    13  gation.
    14    (b) A transfer made by a debtor is voidable as  to  a  creditor  whose
    15  claim  arose before the transfer was made if the transfer was made to an
    16  insider for an antecedent debt, the debtor was insolvent at  that  time,
    17  and  the  insider  had  reasonable  cause to believe that the debtor was
    18  insolvent.
    19    (c) Subject to subdivision (b) of section two hundred  seventy-one  of
    20  this article, a creditor making a claim for relief under subdivision (a)
    21  or  (b)  of  this  section has the burden of proving the elements of the
    22  claim for relief by a preponderance of the evidence.
    23    § 275. When transfer is  made  or  obligation  is  incurred.  For  the
    24  purposes of this article:
    25    (a) a transfer is made:
    26    (1)  with  respect  to  an  asset  that  is real property other than a
    27  fixture, but including the interest of a seller  or  purchaser  under  a
    28  contract  for  the  sale  of  the  asset,  when  the  transfer is so far
    29  perfected that a good-faith purchaser  of  the  asset  from  the  debtor
    30  against which applicable law permits the transfer to be perfected cannot
    31  acquire an interest in the asset that is superior to the interest of the
    32  transferee; and
    33    (2)  with  respect  to an asset that is not real property or that is a
    34  fixture, when the transfer is so far perfected  that  a  creditor  on  a
    35  simple contract cannot acquire a judicial lien otherwise than under this
    36  article that is superior to the interest of the transferee;
    37    (b) if applicable law permits the transfer to be perfected as provided
    38  in  subdivision (a) of this section and the transfer is not so perfected
    39  before the commencement of an action for relief under this article,  the
    40  transfer  is  deemed  made  immediately  before  the commencement of the
    41  action;
    42    (c) if applicable law does not permit the transfer to be perfected  as
    43  provided  in  subdivision (a) of this section, the transfer is made when
    44  it becomes effective between the debtor and the transferee;
    45    (d) a transfer is not made until the debtor has acquired rights in the
    46  asset transferred; and
    47    (e) an obligation is incurred:
    48    (1) if oral, when it becomes effective between the parties; or
    49    (2) if evidenced by a record, when the record signed by the obligor is
    50  delivered to or for the benefit of the obligee.
    51    § 276. Remedies of creditor.  (a) In an action for  relief  against  a
    52  transfer  or  obligation  under this article, a creditor, subject to the
    53  limitations in section two hundred seventy-seven of  this  article,  may
    54  obtain:
    55    (1) avoidance of the transfer or obligation to the extent necessary to
    56  satisfy the creditor's claim;
        A. 1853--A                          6
 
     1    (2) an attachment or other provisional remedy against the asset trans-
     2  ferred or other property of the transferee if available under applicable
     3  law; and
     4    (3)  subject to applicable principles of equity and in accordance with
     5  applicable rules of civil procedure:
     6    (i) an injunction against further  disposition  by  the  debtor  or  a
     7  transferee, or both, of the asset transferred or of other property;
     8    (ii) appointment of a receiver to take charge of the asset transferred
     9  or of other property of the transferee; or
    10    (iii) any other relief the circumstances may require.
    11    (b)  If  a  creditor  has  obtained  a judgment on a claim against the
    12  debtor, the creditor, if the court so orders, may levy execution on  the
    13  asset transferred or its proceeds.
    14    §  276-a.  Attorney's  fees in action or special proceeding under this
    15  article to avoid a transfer or  obligation.  In  an  action  or  special
    16  proceeding  under this article in which a judgment creditor who has been
    17  awarded by court order or agreement or has waived attorney's fees avail-
    18  able to prevailing parties by the terms of the statute under  which  the
    19  creditor's  underlying  claim  arose,  or  representative  asserting the
    20  rights of such judgment creditor, recovers judgment avoiding any  trans-
    21  fer or obligation, the justice or surrogate presiding at the trial shall
    22  fix  the  reasonable attorney's fees of the creditor, or creditor repre-
    23  sentative, incurred in such action  or  special  proceeding  under  this
    24  article  as  an  additional  amount  required  to satisfy the creditor's
    25  claim, and the creditor, or creditor representative, shall have judgment
    26  therefor against the debtor and, subject to the defenses and protections
    27  in section two hundred seventy-seven of this article, against any trans-
    28  feree (or person for whose benefit the transfer was made)  against  whom
    29  relief  is ordered, in addition to the other relief granted by the judg-
    30  ment. The fee so fixed shall be without regard,  or  prejudice,  to  any
    31  agreement,  express  or  implied,  between the creditor, or the creditor
    32  representative, and his or her attorney with respect to the compensation
    33  of such attorney.
    34    § 277. Defenses, liability, and protection of transferee  or  obligee.
    35  (a)  A  transfer  or  obligation  is not voidable under paragraph one of
    36  subdivision (a) of section two hundred  seventy-three  of  this  article
    37  against a person that took in good faith and for a reasonably equivalent
    38  value given the debtor or against any subsequent transferee or obligee.
    39    (b)  To  the extent a transfer is avoidable in an action by a creditor
    40  under paragraph one of subdivision (a) of section two  hundred  seventy-
    41  six of this article the following rules apply:
    42    (1)  Except  as  otherwise  provided in this section, the creditor may
    43  recover judgment for the value of the  asset  transferred,  as  adjusted
    44  under subdivision (c) of this section, or the amount necessary to satis-
    45  fy  the creditor's claim, whichever is less. The judgment may be entered
    46  against:
    47    (i) the first transferee of the asset or the person for whose  benefit
    48  the transfer was made; or
    49    (ii) an immediate or mediate transferee of the first transferee, other
    50  than:
    51    (A) a good-faith transferee that took for value; or
    52    (B)  an  immediate  or  mediate  good-faith  transferee  of  a  person
    53  described in clause (A) of this subparagraph.
    54    (2) Recovery pursuant to paragraph one of subdivision (a) or  subdivi-
    55  sion  (b)  of section two hundred seventy-six of this article of or from
    56  the asset transferred or its proceeds, by levy or otherwise,  is  avail-
        A. 1853--A                          7
 
     1  able  only  against  a  person  described in subparagraph (i) or (ii) of
     2  paragraph one of this subdivision.
     3    (c)  If  the  judgment  under subdivision (b) of this section is based
     4  upon the value of the asset transferred, the judgment  must  be  for  an
     5  amount  equal  to  the  value  of the asset at the time of the transfer,
     6  subject to adjustment as the equities may require.
     7    (d) Notwithstanding voidability of a transfer or an  obligation  under
     8  this  article,  a  good-faith  transferee or obligee is entitled, to the
     9  extent of the value given the debtor for the transfer or obligation, to:
    10    (1) a lien on or a right to retain an interest  in  the  asset  trans-
    11  ferred;
    12    (2) enforcement of an obligation incurred; or
    13    (3) a reduction in the amount of the liability on the judgment.
    14    (e)  A transfer is not voidable under paragraph two of subdivision (a)
    15  of section two hundred seventy-three or section two hundred seventy-four
    16  of this article if the transfer results from:
    17    (1) termination of a lease upon default by the debtor when the  termi-
    18  nation is pursuant to the lease and applicable law; or
    19    (2) enforcement of a security interest in compliance with article nine
    20  of  the  uniform commercial code, other than acceptance of collateral in
    21  full or partial satisfaction of the obligation it secures.
    22    (f) A transfer is not voidable under subdivision (b)  of  section  two
    23  hundred seventy-four of this article:
    24    (1)  to the extent the insider gave new value to or for the benefit of
    25  the debtor after the transfer was made, except to  the  extent  the  new
    26  value was secured by a valid lien;
    27    (2) if made in the ordinary course of business or financial affairs of
    28  the debtor and the insider; or
    29    (3) if made pursuant to a good-faith effort to rehabilitate the debtor
    30  and the transfer secured present value given for that purpose as well as
    31  an antecedent debt of the debtor.
    32    (g)  The  following  rules  determine  the  burden  of proving matters
    33  referred to in this section:
    34    (1) A party that seeks to invoke subdivision (a), (d), (e) or  (f)  of
    35  this  section has the burden of proving the applicability of that subdi-
    36  vision.
    37    (2) Except as otherwise provided in paragraphs three and four of  this
    38  subdivision,  the  creditor  has  the  burden of proving each applicable
    39  element of subdivision (b) or (c) of this section.
    40    (3) The transferee has the burden of proving the applicability to  the
    41  transferee of clause (A) or (B) of subparagraph (ii) of paragraph one of
    42  subdivision (b) of this section.
    43    (4)  A  party  that  seeks  adjustment  under  subdivision (c) of this
    44  section has the burden of proving the adjustment.
    45    (h) The standard of proof required to establish matters referred to in
    46  this section is preponderance of the evidence.
    47    § 278. Extinguishment of claim for relief. A  claim  for  relief  with
    48  respect  to  a transfer or obligation under this article is extinguished
    49  unless action is brought:
    50    (a) under paragraph one of subdivision  (a)  of  section  two  hundred
    51  seventy-three  of  this  article,  not  later  than four years after the
    52  transfer was made or the obligation was incurred or, if later, not later
    53  than one year after the transfer or obligation was or  could  reasonably
    54  have been discovered by the claimant;
    55    (b)  under  paragraph  two  of  subdivision (a) of section two hundred
    56  seventy-three or subdivision (a) of section two hundred seventy-four  of
        A. 1853--A                          8
 
     1  this  article,  not later than four years after the transfer was made or
     2  the obligation was incurred; or
     3    (c)  under subdivision (b) of section two hundred seventy-four of this
     4  article, not later than one year after the transfer was made.
     5    § 279. Governing law.  (a) In this section, the following rules deter-
     6  mine a debtor's location:
     7    (1) A debtor who is an individual is located at the individual's prin-
     8  cipal residence.
     9    (2) A debtor that is an organization and has only one place  of  busi-
    10  ness is located at its place of business.
    11    (3)  A  debtor  that is an organization and has more than one place of
    12  business is located at its chief executive office.
    13    (b) A claim for relief in the nature of a claim for relief under  this
    14  article  is  governed  by the local law of the jurisdiction in which the
    15  debtor is located when  the  transfer  is  made  or  the  obligation  is
    16  incurred.
    17    § 280. Supplementary provisions. Unless displaced by the provisions of
    18  this  article,  the  principles  of  law  and  equity, including the law
    19  merchant and the law relating to principal and agent, estoppel,  laches,
    20  fraud,  misrepresentation,  duress,  coercion,  mistake,  insolvency, or
    21  other validating or invalidating cause, supplement its provisions.
    22    § 281. Uniformity of application and construction. This article  shall
    23  be  applied  and  construed  to  effectuate  its general purpose to make
    24  uniform the law with respect to the subject of this article among states
    25  enacting it.
    26    § 281-a. Relation to electronic  signatures  in  global  and  national
    27  commerce act. This article modifies, limits, or supersedes the Electron-
    28  ic  Signatures  in  Global  and National Commerce Act, 15 U.S.C. Section
    29  7001 et seq., but does not modify, limit, or supersede Section 101(c) of
    30  that act, 15 U.S.C. Section 7001(c), or authorize electronic delivery of
    31  any of the notices described in Section 103(b) of that  act,  15  U.S.C.
    32  Section 7003(b).
    33    § 3. Paragraph 5 of subdivision (c) of section 5205 of the civil prac-
    34  tice  law  and  rules,  as amended by chapter 93 of the laws of 1995, is
    35  amended to read as follows:
    36    5. Additions to an asset described in paragraph two of  this  subdivi-
    37  sion shall not be exempt from application to the satisfaction of a money
    38  judgment  if  (i)  made  after  the  date that is ninety days before the
    39  interposition of the claim on which such judgment was entered,  or  (ii)
    40  deemed  to be [fraudulent conveyances] voidable transactions under arti-
    41  cle ten of the debtor and creditor law.
    42    § 4. Subdivision (g) of section 5519 of the  civil  practice  law  and
    43  rules,  as  added by chapter 184 of the laws of 1988, is amended to read
    44  as follows:
    45    (g) Appeals in medical, dental or podiatric malpractice judgments.  In
    46  an  action for medical, dental or podiatric malpractice, if an appeal is
    47  taken from a judgment in excess of one million dollars and an  undertak-
    48  ing  in  the  amount  of  one  million dollars or the limit of insurance
    49  coverage available to the appellant for  the  occurrence,  whichever  is
    50  greater, is given together with a joint undertaking by the appellant and
    51  any  insurer  of the appellant's professional liability that, during the
    52  period of such stay, the appellant will make no  [fraudulent  conveyance
    53  without   fair  consideration]  voidable  transaction  as  described  in
    54  [section two hundred seventy-three-a] article  ten  of  the  debtor  and
    55  creditor  law, the court to which such an appeal is taken shall stay all
    56  proceedings to enforce the judgment pending such appeal if it finds that
        A. 1853--A                          9
 
     1  there is a reasonable probability that the judgment may be  reversed  or
     2  determined  excessive. In making a determination under this subdivision,
     3  the court shall not consider the availability  of  a  stay  pursuant  to
     4  subdivision  (a)  or  (b)  of  this  section. Liability under such joint
     5  undertaking shall be limited to [fraudulent conveyances] voidable trans-
     6  actions made by the appellant subsequent to the execution of such under-
     7  taking and during the period of such  stay,  but  nothing  herein  shall
     8  limit the liability of the appellant for [fraudulent conveyances] voida-
     9  ble  transactions pursuant to article ten of the debtor and creditor law
    10  or any other law. An insurer that pays money to a beneficiary of such  a
    11  joint  undertaking  shall  thereupon be subrogated, to the extent of the
    12  amount to be paid, to the rights and interests of such beneficiary, as a
    13  judgment creditor, against the  appellant  on  whose  behalf  the  joint
    14  undertaking was executed.
    15    §  5. Subparagraph 4 of paragraph (b) of section 7-3.1 of the estates,
    16  powers and trusts law, as amended by chapter 206 of the laws of 1998, is
    17  amended to read as follows:
    18    (4) Additions to an asset described in subparagraph one of this  para-
    19  graph  shall  not  be  exempt  from application to the satisfaction of a
    20  money judgment if (i) made after the date that is ninety days before the
    21  interposition of the claim on which such judgment was entered,  or  (ii)
    22  deemed  to be [fraudulent conveyances] voidable transactions under arti-
    23  cle ten of the debtor and creditor law.
    24    § 6. Paragraph 3 of subdivision 3-a of  section  50  of  the  workers'
    25  compensation  law,  as  amended  by  chapter 139 of the laws of 2008, is
    26  amended to read as follows:
    27    (3) A member's participation in a group self-insurer shall not relieve
    28  it of its liability for compensation prescribed by this  chapter  except
    29  by  the  payment  thereof  by  the group self-insurer or by itself. Each
    30  member shall be responsible, jointly and severally, for all  liabilities
    31  of  the group self-insurer provided for by this chapter occurring during
    32  its respective period of membership, and such liability shall attach  to
    33  any recipient of a conveyance of assets made in violation of subdivision
    34  (a)  of  section  two hundred [seventy-three] seventy-four of the debtor
    35  and creditor law. As between the employee and  the  group  self-insurer,
    36  notice  to  or  knowledge of the occurrence of the injury on the part of
    37  the member shall be deemed notice or knowledge, as the case may  be,  on
    38  the  part  of  the group self-insurer; jurisdiction of the member shall,
    39  for the purpose of this chapter, be jurisdiction of the  group  self-in-
    40  surer  and  such  group self-insurer shall in all things be bound by and
    41  subject to the orders, findings, decisions or  awards  rendered  against
    42  the  participating  member  for  the  payment  of compensation under the
    43  provisions of this chapter.  The insolvency or bankruptcy of  a  partic-
    44  ipating member shall not relieve the group self-insurer from the payment
    45  of  compensation  for  injuries or death sustained by an employee during
    46  the time the member was a participant in such group self-insurer. Notice
    47  of termination of a participating member shall not be effective until at
    48  least ten days after notice of such termination, on a  prescribed  form,
    49  has been either filed in the office of the chair or sent by certified or
    50  registered  letter,  return  receipt  requested, and also served in like
    51  manner upon the member. In the  event  such  termination  is  due  to  a
    52  member's  failure  to  pay  required contributions, such member's termi-
    53  nation shall not be rescinded more than three times.
    54    § 7. This act shall take effect one hundred twenty days after it shall
    55  have become a law, and shall apply to  a  transfer  made  or  obligation
    56  incurred  on  or  after  such  effective  date, but shall not apply to a
        A. 1853--A                         10
 
     1  transfer made or obligation incurred before  such  effective  date,  nor
     2  shall  it apply to a right of action that has accrued before such effec-
     3  tive date. For the purposes of this act, a transfer is made and an obli-
     4  gation is incurred at the time provided in section 275 of the debtor and
     5  creditor law, as added by section two of this act.

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