Moving Assets vs. Fraudulent Transfer

Suppose Big Client owes you big money. Big Client says, Sorry about that, I just don't have the money. Behind the statement though is your memory of the gaudy purchases, the big house in Lino Lakes, the fancy toys, the boat on White Bear Lake, and other big ticket items. You have a personal guarantee from Big Client, but it actually turns out Big Client's husband owns everything. Is it legit? Well, maybe not.

Minnesota has a law that lets you get to the assets in Big Ticket's husband's name: The Minnesota Uniform Fraudulent Transfer Act ("MUFTA"). The purpose of MUFTA is “to prevent debtors from placing property that is otherwise available for the payment of their debts out of the reach of their creditors.” Finn v. Alliance Bank, 860 N.W.2d 638, 644 (Minn. 2015) (quotation marks omitted).

To fulfill this purpose, “MUFTA allows creditors to recover assets that debtors have fraudulently transferred to third parties.” Id. “To cover the variety of situations in which debtors may attempt to place assets beyond the reach of creditors, MUFTA allows creditors to recover assets that a debtor transfers with fraudulent intent”. Id.

That passage is from a recent Minnesota Court of Appeals opinion, except that I emphasized "intent" because it is the most difficult element to prove. It can be done with work and intense fact investigation, but at least you know there is a body of law that can help you in your recovery. If you suspect someone's hiding assets on you to avoid the bills, call me and let's get to the bottom of it.

The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney. All information contained in links are the property of the linked site.

Related Posts