The court also held that the transferee has the burden of proof in establishing its good faith. The court emphasized that the transferee was not subject to inquiry notice of facts that would have given it knowledge of the fraudulent intent. The court held that the good faith defense is not available if the transferee had fraudulent intent, colluded with a person who was engaged in the fraudulent conveyance, actively participated in the fraudulent conveyance, or had actual knowledge of facts showing its knowledge of the transferor’s fraudulent intent. Yang, _ Cal.App.4th _ (2017) – The Uniform Fraudulent Transfer Act (the predecessor to the Uniform Voidable Transactions Act) allows a transferee to avoid liability if it can establish that it acted in good faith. The Act preempts a state law that allows a debtor to disclaim an inheritance and thereby place the property to be inherited beyond the reach of the government. That provision authorizes the federal government to void a “fraudulent transfer” by a debtor owing a debt to the United States. 2017) – The Federal Debt Collection Procedures Act has a fraudulent transfer provision. – United States Small Business Administration v. Moreover, the secured party took free as a transferee of money. Even if the transfer of funds to the debtor was a constructive or intentionally fraudulent transfer, the secured party was a good faith subsequent transferee that gave value, and hence had a valid defense. There was no basis for a claim of constructive trust because the secured party was not unjustly enriched by the repayment of a debt. ![]() 2017) – A secured party that received payment from the debtor after the debtor had received funds from a related entity had no liability to a creditor of the related entity.
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