Fraudulent Transfer Litigation and Recoveries

Arizona fraudulent transfer litigation is governed by the Uniform Fraudulent Transfer Act which has been in force and effect since 1990 (“UFTA”). To date, the Arizona Legislature has not seen fit to enact the more recently devised Uniform Voidable Transactions Act.

The UFTA permits a four (4) year reach back of fraudulent transfers with a one (1) year discovery rule providing some time flexibility if the action is brought “…within one year after the fraudulent nature of the transfer or obligation was or through the exercise of reasonable diligence could have been discovered by the claimant.” A.R.S. § 44-1009(2).

The UFTA is a creditor tool for reaching assets which have been transferred away from the reach of existing of prospective creditors under circumstances diverted away from a creditor without fair consideration having been received. It applies to both voluntary and involuntary transfers. This means that a windfall of value received by another creditor by way of a foreclosure sale or a sheriff’s sale upon a writ of execution can be pursued.

Transfers of assets from a debtor to affiliates or to asset protection trusts and structures can be pursued. The orchestration of fraudulent transfers by debtors is often careful and methodical.

The draining of assets from artificial business entities to the equity holders without applying them to the satisfaction of creditors’ claims can be challenged not just by the UFTA but also by the common law trust fund theory. The attorneys of the Rose Law Group have extensive UFTA and trust fund theory litigation experience working on behalf of creditors in large scale cases.

Attorneys of the Rose Law Group team possess numerous credentials attesting to their expertise and specialization in fraudulent transfer litigation and claims. These credentials include, but are not limited to, Certified Business Bankruptcy Specialist, American Board of Certification; Certified Creditors’ Rights Specialist, American Board of Certification; and Certified Bankruptcy Specialist, State Bar of Arizona Board of Legal Specialization.

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