Senate Bill 1042c1
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 1999 CS for SB 1042
By the Committee on Commerce and Economic Opportunities; and
Senator Bronson
310-1878-99
1 A bill to be entitled
2 An act relating to fraudulent transfers;
3 amending s. 726.105, F.S.; providing that
4 certain transfers made by a debtor are
5 fraudulent for failure to notify unsecured
6 creditors; creating s. 726.202, F.S.;
7 prescribing conditions under which debtor
8 transfers will be deemed fraudulent for failure
9 to provide notice; prescribing the form and
10 timing of such notice; providing an exemption;
11 creating s. 726.203, F.S.; providing for
12 personal liability of affiliates and insiders
13 who participate in fraudulent transfers;
14 providing for costs and attorney's fees;
15 providing an effective date.
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17 Be It Enacted by the Legislature of the State of Florida:
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19 Section 1. Subsection (1) of section 726.105, Florida
20 Statutes, is amended to read:
21 726.105 Transfers fraudulent as to present and future
22 creditors.--
23 (1) A transfer made or obligation incurred by a debtor
24 is fraudulent as to a creditor, whether the creditor's claim
25 arose before or after the transfer was made or the obligation
26 was incurred, if the debtor made the transfer or incurred the
27 obligation:
28 (a) With actual intent to hinder, delay, or defraud
29 any creditor of the debtor; or
30 (b) Without receiving a reasonably equivalent value in
31 exchange for the transfer or obligation, and the debtor:
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CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 1999 CS for SB 1042
310-1878-99
1 1. Was engaged or was about to engage in a business or
2 a transaction for which the remaining assets of the debtor
3 were unreasonably small in relation to the business or
4 transaction; or
5 2. Intended to incur, or believed or reasonably should
6 have believed that he or she would incur, debts beyond his or
7 her ability to pay as they became due; or.
8 (c) Without giving the notice to unsecured creditors
9 required by s. 726.202.
10 Section 2. Section 726.202, Florida Statutes, is
11 created to read:
12 726.202 Notice to unsecured creditors.--
13 (1) Any debtor who transfers 51 percent or more of the
14 fair market value of the assets, supplies, inventory,
15 merchandise, materials, or other property held by such debtor,
16 not in the ordinary course of the debtor's business, commits a
17 fraudulent transfer if such debtor fails to provide actual
18 notice of the proposed transfer to the debtor's unsecured
19 creditors, by personal delivery or certified mail, and by
20 publication in a local paper, not less than 15 days prior to
21 the effective date of the transfer.
22 (2) Any debtor who has provided a security agreement
23 to its creditors pursuant to the provisions of chapter 679 is
24 exempt from the notice requirements under subsection (1) as to
25 such creditors.
26 Section 3. Section 726.203, Florida Statutes, is
27 created to read:
28 726.203 Liability of affiliates and insiders.--Any
29 affiliate or insider who knowingly participates, either
30 directly or indirectly, in a fraudulent transfer under s.
31 726.105 is personally liable to any secured or unsecured
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CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 1999 CS for SB 1042
310-1878-99
1 creditor for the full amount of such secured or unsecured
2 creditor's claim, including the cost and attorney's fees
3 incurred by such secured or unsecured creditor in perfecting
4 such claim.
5 Section 4. This act shall take effect October 1, 1999.
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7 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
COMMITTEE SUBSTITUTE FOR
8 Senate Bill 1042
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10 Amends Florida's Uniform Fraudulent Transfer Act rather than
creating a specific statutory provision governing bulk sales.
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Specifies that the debtor's sale of 51 percent or more of the
12 fair market value of assets, inventory, supplies, merchandise,
materials, or other property, not sold in the ordinary course
13 of the seller's business, is a fraudulent transfer pursuant to
ch. 726, F.S., unless the seller gives unsecured creditors
14 notice of the proposed transfer.
15 Provides specific procedures for notice, requiring that such
notice be given 15 days prior to the proposed transfer and
16 mandating that such notice be given by personal delivery or
certified mail, and by publication in a local paper.
17
Exempts debtors who have provided creditors with a security
18 agreement pursuant to ch. 679, Florida's UCC Article 9.
19 Provides that affiliates or insiders who knowingly participate
in a fraudulent transfer are personally liable to secured and
20 unsecured creditors alike. Includes provisions for the
recovery of costs and attorney's fees relating to the claim.
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