Fraudulent conveyance?

[Edward S. Feldman]

Facts:

 

A & B own real property as tenants in common.  A conveys his interest to C.  A few years later B & C convert property to condos.  A couple of more years C sells to Purchaser while B holds on to his unit.

 

A is in a divorce and court finds conveyance to C was fraudulent as to ex-wife’s interest.

 

XYZ now sues and gets judgment against A – both after the conveyance to purchaser - and claims that since the conveyance to C was “fraudulent” that all subsequent conveyances are void.  Moreover, XYZ has a right to lien B’s condo unit since A & B originally owned the entire building.

 

I think XYZ’s attorneys are nuts – am I missing something?  Any authority?

 

Edward S. Feldman, Esq. Attorney at Law FELDMAN & ASSOCIATES, PLLC 33 East 33rd Street, Suite 802 New York, New York 10016 efel...@feldmanandassociates.com tel: NJ tel: fax: 212-685-2277 ext 15 201-906-7877 212-725-2798

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[Michael Treybich]

Hi Ed,

It depends on the facts.

Take a look at Debtor Creditor law Art. 10.

Sections 273 - 276.

The case law re: "fair consideration" for the presumed fraudulent conveyances (273-275) and for "badges of fraud" to prove intentional fraudulent conveyance (276 and 276-a) are very broad and give the court a lot of lee way to do "equity".

Also, the statutory definition of "creditor" and "debt" is REALLY broad and can be for future debts as well (either 271 or 272 - I don't recall).

Your saving grace here (I assume you represent Purchaser), is that Purchaser may be protected as a bona fide purchaser for value and without notice, so long as they purchased prior to the wife's matrimonial attorney filing a notice of pendency with a copy of the automatic matrimonial stay, and if they didn't have actual notice.

I spoke to the court on the MLK OSC, and there's an update, call me about that and as a bonus I'll send you the referee's decision in a similar case to what you're describing. (I represented a creditor of the husband and wife sued to vacate our judgment based on an alleged fraudulent conveyance, she lost at trial - it might help you with citations, etc.)

On Thursday, September 4, 2014 4:19:18 PM UTC-4, Edward S. Feldman wrote:

Facts:

 

A & B own real property as tenants in common.  A conveys his interest to C.  A few years later B & C convert property to condos.  A couple of more years C sells to Purchaser while B holds on to his unit.

 

A is in a divorce and court finds conveyance to C was fraudulent as to ex-wife’s interest.

 

XYZ now sues and gets judgment against A – both after the conveyance to purchaser - and claims that since the conveyance to C was “fraudulent” that all subsequent conveyances are void.  Moreover, XYZ has a right to lien B’s condo unit since A & B originally owned the entire building.

 

I think XYZ’s attorneys are nuts – am I missing something?  Any authority?

 

Edward S. Feldman, Esq. Attorney at Law FELDMAN & ASSOCIATES, PLLC 33 East 33rd Street, Suite 802 New York, New York 10016

efeldman@feldmanandassociates.com

tel: NJ tel: fax: 212-685-2277 ext 15 201-906-7877 212-725-2798