Vermont Enacts Provisions Regarding Uniform Voidable Transactions Act
The state of Vermont enacted provisions through House Bill 35 regarding its Uniform Voidable Transactions Act. These provisions are effective on July 1, 2017.
Sec. 1. 9 V.S.A. chapter 57 Subchapter 1 is now titled “Voidable Transactions” rather than “Fraudulent Transfers.” Amendments made to § 2285 make minor changes to many of the definitions in the section. The “affiliate” definition has been changed to include a “corporation 20 percent or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote by the debtor or a person 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 that holds the securities: as a fiduciary or agent without sole discretionary power to vote the securities or solely to secure a debt, if the person has not, in fact, exercised the power to vote.”
§ 2286 relating to insolvency has been amended. Section B now states “a debtor who is generally not paying his or her debts as they become due other than as a result of a bona fide dispute is presumed to be insolvent. The presumption imposes on the party against which the presumption has directed the burden of proving that the nonexistence of insolvency is more probable than its existence.”
§ 2288 and § 2289 are amended to shift the burden of proving the elements of the claim for relief by a preponderance of the evidence to a creditor making a claim for relief under the applicable subsection.
§ 2292 also includes provisions relating to the burden of proof for matters relating to this section;
- A party that seeks to invoke subsection (a), (d), (e), or (f) of this section has the burden of proving the applicability of that subsection
- the creditor has the burden of proving each applicable element of subsection (b) or (c) of this section except as otherwise provided in subdivisions (3) and (4) of this subsection
The standard of proof required is a preponderance of the evidence.
§ 2294 adds provisions regarding the governing law. Certain rules are used to determine a debtor’s location:
- Individual debtors are located at the individual principal residence
- If a debtor only has one place of business it is located at that place of business
- If more than one place of business the debtor is located at its chief executive office
The local law of the jurisdiction in which the debtor is located when the transfer is made or the obligation is incurred is the governing law for claims made under this chapter.
The full text of House Bill 35.
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