EXCERPTS FROM THE TEXAS UNIFORM FRAUDULENT TRANSFER ACT

§ 24.001 Short Title

This chapter may be cited as the Uniform Fraudulent Transfer Act.

§ 24.002 Definitions

In this Chapter:

(1) "Affiliate" means: (A) A person ...

(B) a corporation 20 percent or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote, by the debtor or a person who directly or indirectly owns, controls, or holds, with power to vote, 20 percent or more of the outstanding securities of the debtor, other than a person who holds the securities:

(i) as a fiduciary or agent without sole power to vote the securities; or

(ii) solely to secure a debto, if the person has not in fact exercised the power to vote;

(D) a person who operates the debtor's business ...

(2) "Asset" means the property of a debtor, but the term does not include: (A) property to the extent it is encumbered by a valid lien;

(B) property to the extent it is generally exempt under nonbankruptcy law; or

(3) "Claim" means a right to payment or property, whether or not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured

(4) "Creditor means a person, including a spouse, minor, or ward, who has a claim.

(5) "Debt" means liability on a claim

(6) "Debtor means a person who is liable on a claim.

(7) "Insider" includes:

(A) if the debtor is an individual ...
(B) if the debtor is a corporation (i) a director of the debtor;
(ii) an officer of the debtor;
(iii) a person in control of the debtor;
(iv) a partnership in which the debtor is a general partner;
(v) a general partner in a partnership described in Subparagraph (iv) of this paragraph; or
(vi) a relative of a general partner, director, officer, or person in control of the debtor; (C) if the debtor is a partnership ...
(D) an affiliate, or insider of an affiliate as if the affiliate were the debtor; and
(E) a managing agent of the debtor.
(8) "Lien" means a charge against or an interest in property to secure the payment of a debt or performance of an obligation, and includes a security interest created by agreement, a judicial lien obtained by legal or equitable process or proceedings, a common-law lien, or a statutory lien.

(9) "Person" means an individual, partnership, corporation, association, organization, government or governmental subdivision, or agency, business trust, estate, trust, or any other legal or commercial entity.

(10) "Property" means anything that may be the subject of ownership

(11) "Relative" means ...

(12) "Transfer" means every mode, director indirect, absolute or conditions, voluntary or involuntary, of disposing of or parting with any asset of an interest in an asset, and includes payments of money, release, lease and creation of a lien or other encumbrance.

(13) "Valid lien" means a lien that is effective against the holder of a judicial lien subsequently obtained by legal or equitable process or proceedings.

§ 24.003 Insolvency (a) A debtor is insolvent if the sum of the debtor's debts is greater that all of the debtor's assets at a fair valuation.
(b) A debtor who is generally not able to pay the debtor's debts as the become due is presumed to be insolvent
(c) A partnership is insolvent if ...
(d) Assets under this section do 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.
(e) Debts under this section do not include an obligation to the extent it is secured by a valid lien on property of the debtor not included as an asset. § 24.004 Value (a) Value is given for a transfer or an obligation if, in exchange for the transfer or obligation, property is transferred or an antecedent debt is secured or satisfied, but value does not include an unperformed proper made otherwise than in the ordinary course of the promisor's business to furnish support to the debtor or another person.
(b) for the purposes of Sections 24.005(a)(2) and 24.006 of this code, a person gives a reasonably equivalent value if the person acquires an interest of the debtor in an assets pursuant to regularly conducted, non-collusive foreclosure sale ...
(c) a transfer is made for present value if the exchange ...
(d) "Reasonable equivalent value" includes without limitation, a transfer or obligation that is within the range of values for which the transferor would have sold the assets in an arm's length transaction. § 24.005 Transfers Fraudulent as to Present and Future Creditors (a) A transfer made or obligation incurred by a debtor is fraudulent as to a creditor, whether the creditor's claim arose before or within a reasonable time after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation: (1) with actual intent to hinder, delay, or defraud any creditor of the debtor; or
(2) without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor: (A) was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction; or
(B) intended to incur, or believed or reasonably should have believed that the debtor would incur, debts beyond the debtor's ability to pay as they became due. (b) In determining actual intent under Subsection (a)(1) of this section, consideration may be given, among other factors to whether: (1) the transfer or obligation was to an insider;
(2) the debtor retained possession or control of the property transferred after the transfer;
(3) the transfer or obligation was concealed;
(4) before the transfer was made or obligation was incurred, the debtor had been sued or threatened with suit;
(5) the transfer was of substantially all of the debtor's assets
(6) the debtor absconded;
(7) the debtor removed or concealed the assets
(8) the value of the consideration received by the debtor was reasonably equivalent to the value of the assets transferred or the amount of the obligation incurred;
(9) the debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred;
(10) the transfer occurred shortly before or shortly after a substantial debt was incurred; and
(11) the debtor transferred the essential assets of the business to a lienor who transferred the assets to an insider of the debtor.
§ 24.006 Transfers Fraudulent as to Present Creditors

(a) A transfer made or obligation incurred by a debtor is fraudulent as to a creditor whose claim arose before the transfer was made or the obligation was incurred if the debtor made the transfer or incurred the obligation without receiving reasonably equivalent value in exchange for the transfer or obligation and the debtor was insolvent at that time or the debtor became insolvent as a result of the transfer or obligation.
(b) A transfer made by a debtor is fraudulent as to a creditor whose claim arose before the transfer was made if the transfer was made to an insider for an antecedent debt, the debtor was insolvent at that time, and the insider had reasonable cause to believe that the debtor was insolvent.

§ 24.007 When Transfer is Made or Obligation is Incurred

For the purposes of this chapter:

(1) a transfer is made:

(A) with respect to an asset that is real property other than a fixture ....
(B) with respect to an asset that is not real property or that is a fixture, when the transfer is so far perfected that a creditor on a simple contract cannot acquire a judicial lien otherwise than under this chapter that is superior to the interest of the transferee;

(2) if applicable law permits the transfer to be perfected as provided in Subdivision (1) of this section and the transfer is not so perfected before the commencement of an action for relief under this chapter, the transfer is deemed made immediately before the commencement of the action;
(3) if applicable law does not permit the transfer to be perfected as provided in Subdivision (1) of this section, the transfer is made when it becomes effective between the debtor and the transferee;
(4) a transfer is not made until the debtor has acquired rights in the asset transferred; and
(5) an obligation is incurred:

(A) if oral ...

(B) if evidenced by a writing, when the writing executed by the obligor is delivered to or for the benefit of the obligee.

§ 24.008 Remedies of Creditors

(a) In an action for relief against a transfer or obligation under this chapter, a creditor, subject to the limitations in Section 24.009 of this code, may obtain:

(1) avoidance of the transfer or obligation to the extent necessary to satisfy the creditor's claim;
(2) an attachment or other provisional remedy against the asset transferred or other property of the transferee in accordance with the applicable Texas Rules of Civil Procedure or the Civil Practices and Remedies Code relating to ancillary proceedings; or
(3) subject to the applicable principals of equity and in accordance with the applicable rules of civil procedure;
(A) an injunction against further disposition ...
(B) an appointment of a receiver ...
(C) any other relief the circumstances may require.

(b) If a creditor has obtained an judgment on a claim against the debtor, the creditor, if the court so orders, may levy execution on the asset transferred or its proceeds.

§ 24.009 Defenses, Liability , and Protection of Transferee

(a) A transfer or obligation is not voidable under Section 24.005(a)(1) of this codes against a person who took in good faith and for a reasonably equivalent value or against any subsequent transferee or obligee.

(b) Except as otherwise provided in this section, to the extent a transfer is voidable in an action by a creditor under Section 24.008(a)(1) of this code, the creditor may recover judgment for the value of the asset transferred, as adjusted under Subsection (c) of this section, or the amount necessary to satisfy the creditor's claim, whichever is less. The judgment may be entered against:

(1) the first transferee of the asset or the person for whose benefit the transfer was made; or

(2) any subsequent transferee other than a good faith transferee who took for value or from any subsequent transferee.

(c)(2) Except as provided by Subdivison (2) of this subsection, if the judgment under Subsection (b) of this section is based upon the value of the asset transferrred, the judgment must be for an amount equal to the value of the asset at the time of transferr, subject to adjustment as the equities may require.

(2) The value of the assets transferrred is not be be adjusted to include the value of improvements made by a good faith transferee, inlcuding:

(A) physical additions or changes to the aset transferred;

(B) repairs to the asset;

(D) payment of any debt secured by a lien on the asset that is superior or equal to the rights of a voiding creditor under this chapter; and

(E) preservation of the asset.

(d)(1) Notwithstanding voidability of a transfer or an obligation under this chapter, a good faith transferee or obligee is entitled, at the transferee's or obligee's election, to the extent of the value of the value given the debtor for the transfer or obligation, to:

(A) a lien, prior to the rights of a voiding creditor under this chapter, or a right to retain any interest in the asset transferred;

(B) enforcement of any obligation incurred; or

(2) Notwithstanding voidability of a transfer under this chapter, to the extent of any improvements by a good faith transferee, the good faith transferee is entitled to a lien on the asset transferred prior to the rights of a voiding creditor under this chapter.
(A)
(B)
(C)
(D)
(E)

(e) A transfer is not voidable under Section 24.005(a)(2) or Section 24.006 of this code 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) the enforcement of a security interest in compliance with Chapter 9 of this code.

(f) A transfer is not voidable under Section 24.006(b) of this code:

(1) to the extent the insider gave new value to or for the benefit of the debtor after the transfer was made unless 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

Texas Business & Commerce Code § 9.301

(a)
(b)
(c) A "lien creditor" means a creditor who has acquired a lien on the property involved by attachment, levy or the like, and inlcudes an assignee for benefit of creditors from the time of the assignment, and a trsutee in bankruptcy from the date of the filing of the petition or a receiver in equity from the time of appointment
(d) A person who becomes a lien creditor while a security interest is perfected takes subject to the security interest only to the extent that it secures advances made before he becomes a lien creditor or within 45 days thereafter or made without knowledge of the lient or purusant to a commitment entered into without knowledge of the lien.