HB 4233 — Relating generally to fraudulent transfers

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Red = new code to be enacted WEST virginia legislature regular session ENROLLED Committee Substitute for House Bill 4233 By Delegates Storch, Hamrick, Ferro, Barrett and Ellington [[Passed[Introduced MarchJanuary 10,22, 2018;

inReferred effectto ninetythe daysCommittee fromon passage.the Judiciary.] A BILL to amend and reenact §40-1A-1, §40-1A-2, §40-1A-4, §40-1A-5, §40-1A-6, and §40-1A-8 of the Code of West Virginia, 1931, as amended;

.] AN ACT to amend and reenact §40-1A-1, §40-1A-2, §40-1A-4, §40-1A-5, §40-1A-6, and §40-1A-8 of the Code of West Virginia, 1931, as amended;

providing for the application to series organizations;

defining terms;

providing that each series organization and each protected series of the organization is a separate person;

providing that a series organization includes a foreign series limited liability company;

UNIFORM FRAUDULENT TRANSFERS VOIDABLE TRANSACTIONS ACT.

(1) A person who that directly or indirectly owns, controls or holds with power to vote, 20 percent or more of the outstanding voting securities of the debtor, other than a person who holds the securities:

(iii) A general partner in a partnership described in subparagraphparagraph (ii)(ii); of this paragraph;

(v) A general partner in a partnership described in subparagraphparagraph (iv)(iv); of this paragraph;

(iv) A general partner in a partnership described in subparagraphparagraph (iii)(iii); of this paragraph;

(h) (i) “Lien” means a charge against or an interest in property to secure 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.

(i) (k) “Person” means an individual, partnership, corporation, association, organization, trust, business or nonprofit entity, public corporation, government or governmental subdivision or agency, business trust, estate, trust or any other legal or commercial entity.

(j) (l) “Property” means anything that may be the subject of ownership.

(k) (n) “Relative” means an individual related by consanguinity within the third degree as determined by the common law, a spouse or an individual related to a spouse within the third degree as so determined, and includes an individual in an adoptive relationship within the third degree.

(l) (p) “Transfer” means every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an asset, and includes payment of money, release, lease, license, and creation of a lien or other encumbrance.

(p) (q) “Valid lien” means a lien that is effective against the holder of a judicial lien subsequently obtained by legal or equitable process or proceedings.

(b) A debtor who is generally not paying his or her her (or her) debts as they become due, other than as a result of a bona fide dispute, is presumed to be insolvent.

or (ii) Intended to incur, or believed or reasonably should have believed that he or she (or she) would incur, debts beyond his or her  ability(or her) ability to pay as they became due.

(b) If applicable law permits the transfer to be perfected as provided in subdivision (a) of this subsection and the transfer is not so perfected before the commencement of an action for relief under this article, the transfer is considered made immediately before the commencement of this action;

(c) If applicable law does not permit the transfer to be perfected as provided in subdivision (a)(a), of this subsection, the transfer is made when it becomes effective between the debtor and the transferee;

or (2) Enforcement of a security interest in compliance with §46-9-1article etnine seq.of the uniform commercial code.

of this code.

(3) The transferee has the burden of proving the applicability to the transferee of  subdivisionsubparagraph (1)(i) or (2),(ii), paragraph (A), subdivision (1), subsection (b) of this section.

§40-1A-13.  Governing law.Law.

Application to and recognition of a foreign series organization.

“Protected series” means an arrangement, however denominated, created by a series organization that, pursuant to the law under which the series organization is organized, has the characteristics set forth in thesubdivision definition(2) of a series organization in §40-1A-14 of this code.subsection.

(c)§40-1A-15  ARelation seriesto organizationElectronic includesSignatures aIn foreignGlobal seriesAnd limitedNational liabilityCommerce company,Act. or one or more protected series thereof, which is organized as a series organization under the laws of another state or jurisdiction, and shall be recognized as a foreign series limited liability company in this state pursuant to, and in compliance with the provisions of §31B-10-1 et seq.

of this code.

§40-1A-15.  Relation to Electronic Signatures In Global And National Commerce Act.

  NOTE:

The purpose of this bill concerns generally fraudulent transfers.

The bill establishes that a presumption imposes on the party against which the presumption is directed the burden of proving that the nonexistence of insolvency is more probable than its existence.

The bill provides that a creditor making a claim for relief has the burden of proving the elements of the claim for relief by a preponderance of the evidence.

The bill sets forth rules regarding the defenses, liability and protection of transferees.

The bill establishes the governing law.

The bill provides for the application to series organizations.

The bill provides for the limiting, modifying or superseding of the federal Electronic Signatures in Global and National Commerce Act.