Creditors Beware - Greater Protection Under the Law Is Now Afforded to a Third-Party Transferee Defending Against a Fraudulent Transfer Claim

Creditors Beware - Greater Protection Under the Law Is Now Afforded to a Third-Party Transferee Defending Against a Fraudulent Transfer Claim

CONTACT

Clifford R. Horner, Esq.

Email Address: chorner@hornerlawgroup.com

Pursuant to a recent California Court ruling, to be found liable as a transferee of assets under a creditor’s fraudulent transfer claim, the transferee must know at least some fact that would put the transferee on notice that the debtor was trying to use the transaction to defraud creditors. Absent that fact, a transferee seemingly has no duty to investigate the debtor's affairs generally as to any potential ill intent. (See Nautilus, Inc. v. Yang; Urban Financial Group (2017)).

As such, creditors must now be even more diligent in recording their judgment abstracts and immediately tracing, liening, and providing creditor notices with respect to all of the debtor’s assets prior to the debtor transferring its assets to any third party.

This legal summary is provided by Horner Law Group, P.C., Walnut Creek, CA. for educational and informational purposes only and is not intended and should not be construed as legal advice.

Subscribe to Horner Law Group Mailing Lists

Get the latest significant legal alerts, news, webinars, and insights that affect your industry.

Legal alert from Horner Law Group. Text: Business disputes involving fraudulent asset diversion may result in treble damages and fees with criminal intent.

Legal e-alert: COVID-19 did not prevent an unlawful detainer action, dark blue background.

Blue graphic: Horner Law Group legal alert. Headline reads:

Blue graphic with white text: Prejudgment Attachment for contract claims with

Text graphic: Legal corner. Creditors beware of greater protection for third-party transferees defending fraudulent transfer claims.

Legal alert: Buyer's broker not obligated to advise seller of low purchase price for unimproved land.

Text on a blue background:

California Eviction Defense Manual cover, blue background, white circular icon with a document symbol.

Text overlay: California Landlord Tenant Practice, blue background, document icon.

White icon on a blue background. Text reads: California Real Estate Brokers - Law and Litigation.

White circle with newspaper icon, text:

Blue background with text:

Text with title:

Text on a blue background:

Text over blue background: title

Blue graphic with text:

Title card:

Headline:

Blue background with white text:

Blue graphic:

Legal e-alert from Horner Law Group. Headline states ambiguity in entitlements led to failed specific performance claim.

Blue background with title:

Dark blue background with white text:

Text on a blue background:

Blue background with text:

Text on a blue background: California Court decision limits commercial landlord's use of security deposit.

Blue graphic with text: Rent Deferral Agreements: Avoiding Unexpected Tax Liability. White icon of a document.

California Court of Appeal text on a blue background. Headline:

Legal e-alert from Horner Law Group regarding business disputes, fraudulent assets, treble damages, attorney fees, criminal intent.

Legal e-alert: COVID-19 did not prevent an unlawful detainer action, dark blue background.

Blue graphic: Horner Law Group legal alert. Headline reads:

Blue graphic with white text: Prejudgment Attachment for contract claims with

Text graphic: Legal corner. Creditors beware of greater protection for third-party transferees defending fraudulent transfer claims.

Legal alert: Buyer's broker not obligated to advise seller of low purchase price for unimproved land.

Text on a blue background:

California Eviction Defense Manual cover, blue background, white circular icon with a document symbol.

Text overlay: California Landlord Tenant Practice, blue background, document icon.

White icon on a blue background. Text reads: California Real Estate Brokers - Law and Litigation.

White circle with newspaper icon, text:

Blue background with text:

Text with title:

Text on a blue background:

Text over blue background: title

Blue graphic with text:

Title card:

Headline:

Blue background with white text:

Blue graphic:

Legal e-alert from Horner Law Group. Headline states ambiguity in entitlements led to failed specific performance claim.

Blue background with title:

Dark blue background with white text:

Text on a blue background:

Blue background with text:

Text on a blue background: California Court decision limits commercial landlord's use of security deposit.

Blue graphic with text: Rent Deferral Agreements: Avoiding Unexpected Tax Liability. White icon of a document.

California Court of Appeal text on a blue background. Headline:

CONTACT OUR TEAM

Horner Law Group serves clients across California, including Walnut Creek, Oakland, San Francisco, San Jose, Los Angeles, Orange County, and San Diego.

Get In Touch

Phone:

Email:

info@hornerlawgroup.com

📍 Office Location

Horner Law Group, PC

800 S. Broadway, Suite 200

Walnut Creek, CA 94596

Share by: