Missouri Statute | Act | Code |Debtor-creditor Relations| US Code - US Statute | Chapter 428 Fraudulent Conveyances And Liens

Sections 428.005 to 428.059 may be cited as the "Uniform
Fraudulent Transfer Act". (L. 1992 S.B. 448)

As used in sections 428.005 to 428.059, the following terms mean:

(1) "Affiliate":

(a) A person who directly or indirectly owns, controls, or holds with
power to vote, twenty percent or more of the outstanding voting
securities of the debtor, other than a person who holds the securities,

(i) As a fiduciary or agent without sole discretionary power to vote the
securities; or

(ii) Solely to secure a debt, if the person has not exercised the power
to vote;

(b) A corporation twenty 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 who directly or indirectly owns,
controls, or holds, with power to vote, twenty percent or more of the
outstanding voting securities of the debtor, other than a person who
holds the securities,

(i) As fiduciary or agent without sole power to vote the securities; or

(ii) Solely to secure a debt, if the person has not in fact exercised the
power to vote;

(c) A person whose business is operated by the debtor under a lease or
other agreement, or a person substantially all of whose assets are
controlled by the debtor; or

(d) A person who operates the debtor's business under a lease or other
agreement or controls substantially all of the debtor's assets.

(2) "Asset", property of a debtor, but the term does not include:

(a) Property to the extent it is encumbered by a valid lien;

(b) Property to the extent it is generally exempt under nonbankruptcy
law; or

(c) An interest in property held in tenancy by the entireties to the
extent it is not subject to process by a creditor holding a claim against
only one tenant.

(3) "Claim", a right to payment, whether or not the right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured, or unsecured.

(4) "Creditor", a person who has a claim.

(5) "Debt", liability on a claim.

(6) "Debtor", a person who is liable on a claim.

(7) "Insider" includes:

(a) If the debtor is an individual,

a. A relative of the debtor or of a general partner of the debtor;

b. A partnership in which the debtor is a general partner;

c. A general partner in a partnership described in subparagraph b; or

d. A corporation of which the debtor is a director, officer, or person in
control;

(b) If the debtor is a corporation,

a. A director of the debtor;

b. An officer of the debtor;

c. A person in control of the debtor;

d. A partnership in which the debtor is a general partner;

e. A general partner in a partnership described in subparagraph d; or

f. A relative of a general partner, director, officer, or person in
control of the debtor;

(c) If the debtor is a partnership,

a. A general partner in the debtor;

b. A relative of a general partner in, a general partner of, or a person
in control of the debtor;

c. Another partnership in which the debtor is a general partner;

d. A general partner in a partnership described in subparagraph c; or

e. A person in control of the debtor;

(d) An affiliate, or an insider of an affiliate as if the affiliate were
the debtor; and

(e) A managing agent of the debtor.

(8) "Lien", a charge against or an interest in property to secure payment
of a debt or performance of an obligation, and includes a security
interest created by agreement, a judicial lien obtained by legal or
equitable process or proceedings, a common-law lien, or a statutory lien.

(9) "Person", an individual, partnership, corporation, association,
organization, government or governmental subdivision or agency, business
trust, estate, trust, or any other legal or commercial entity.

(10) "Property", anything that may be the subject of ownership.

(11) "Relative", an individual related by consanguinity within the third
degree as determined by the common law, a spouse, or an individual
related to a spouse within the third degree as so determined, and
includes an individual in an adoptive relationship within the third
degree.

(12) "Transfer", every mode, direct or indirect, absolute or conditional,
voluntary or involuntary, of disposing of or parting with an asset or an
interest in an asset, and includes payment of money, release, lease, and
creation of a lien or other encumbrance.

(13) "Valid lien", a lien that is effective against the holder of a
judicial lien subsequently obtained by legal or equitable process or
proceedings. (L. 1992 S.B. 448)

1. A debtor is insolvent if the sum of the debtor's debts is
greater than all of the debtor's assets at a fair valuation.

2. A debtor who is generally not paying his debts as they become due is
presumed to be insolvent.

3. A partnership is insolvent under subsection 1 of this section if the
sum of the partnership's debts is greater than the aggregate, at a fair
valuation, of all of the partnership's assets and the sum of the excess
of the value of each general partner's nonpartnership assets over the
partner's nonpartnership debts.

4. Assets under this section do not include property that has been
transferred, concealed, or removed with intent to hinder, delay, or
defraud creditors or that has been transferred in a manner making the
transfer voidable under sections 428.005 to 428.059.

5. Debts under this section do not include an obligation to the extent it
is secured by a valid lien on property of the debtor not included as an
asset. (L. 1992 S.B. 448)

1. Value is given for a transfer or an obligation if, in
exchange for the transfer or obligation, property is transferred or an
antecedent debt is secured or satisfied, but value does not include an
unperformed promise made otherwise than in the ordinary course of the
promisor's business to furnish support to the debtor or another person.

2. For the purposes of subdivision (2) of subsection 1 of section 428.024
and section 428.029, a person gives a reasonably equivalent value if the
person acquires an interest of the debtor in an asset pursuant to a
regularly conducted, noncollusive foreclosure sale or execution of a
power of sale for the acquisition or disposition of the interest of the
debtor upon default under a mortgage, deed of trust, or security
agreement.

3. A transfer is made for present value if the exchange between the
debtor and the transferee is intended by them to be contemporaneous and
is in fact substantially contemporaneous. (L. 1992 S.B. 448)

1. A transfer made or obligation incurred by a debtor is
fraudulent as to a creditor, whether the creditor's claim arose before or
after the transfer was made or the obligation was incurred, if the debtor
made the transfer or incurred the obligation:

(1) With actual intent to hinder, delay, or defraud any creditor of the
debtor; or

(2) Without receiving a reasonably equivalent value in exchange for the
transfer or obligation, and the debtor:

(a) Was engaged or was about to engage in a business or a transaction for
which the remaining assets of the debtor were unreasonably small in
relation to the business or transaction; or

(b) Intended to incur, or believed or reasonably should have believed
that he would incur, debts beyond his ability to pay as they became due.

2. In determining actual intent under subdivision (1) of subsection 1 of
this section, consideration may be given, among other factors, to whether:

(1) The transfer or obligation was to an insider;

(2) The debtor retained possession or control of the property transferred
after the transfer;

(3) The transfer or obligation was disclosed or concealed;

(4) Before the transfer was made or obligation was incurred, the debtor
had been sued or threatened with suit;

(5) The transfer was of substantially all the debtor's assets;

(6) The debtor absconded;

(7) The debtor removed or concealed assets;

(8) The value of the consideration received by the debtor was reasonably
equivalent to the value of the asset transferred or the amount of the
obligation incurred;

(9) The debtor was insolvent or became insolvent shortly after the
transfer was made or the obligation was incurred;

(10) The transfer occurred shortly before or shortly after a substantial
debt was incurred; and

(11) The debtor transferred the essential assets of the business to a
lienor who transferred the assets to an insider of the debtor. (L. 1992
S.B. 448)

(2004) Failure to specifically plead theory of piercing the corporate
veil or alter ego does not preclude creditor from recovering under
Uniform Fraudulent Transfer Act. Fischer v. Brancato, 147 S.W.3d 794
(Mo.App. E.D.).

1. A transfer made or obligation incurred by a debtor is
fraudulent as to a creditor whose claim arose before the transfer was
made or the obligation was incurred if the debtor made the transfer or
incurred the obligation without receiving a reasonably equivalent value
in exchange for the transfer or obligation and the debtor was insolvent
at that time or the debtor became insolvent as a result of the transfer
or obligation.

2. A transfer made by a debtor is fraudulent as to a creditor whose claim
arose before the transfer was made if the transfer was made to an insider
for an antecedent debt, the debtor was insolvent at that time, and the
insider had reasonable cause to believe that the debtor was insolvent.
(L. 1992 S.B. 448)

For the purposes of sections 428.005 to 428.059:

(1) A transfer is made:

(a) With respect to an asset that is real property other than a fixture,
but including the interest of a seller or purchaser under a contract for
the sale of the asset, when the transfer is so far perfected that a
good-faith purchaser of the asset from the debtor against whom applicable
law permits the transfer to be perfected cannot acquire an interest in
the asset that is superior to the interest of the transferee; and

(b) With respect to an asset that is not real property or that is a
fixture, when the transfer is so far perfected that a creditor on a
simple contract cannot acquire a judicial lien otherwise than under
sections 428.005 to 428.059 that is superior to the interest of the
transferee;

(2) If applicable law permits the transfer to be perfected as provided in
subdivision (1) of this section and the transfer is not so perfected
before the commencement of an action for relief under sections 428.005 to
428.059, the transfer is deemed made immediately before the commencement
of the action;

(3) If applicable law does not permit the transfer to be perfected as
provided in subdivision (1) of this section, the transfer is made when it
becomes effective between the debtor and the transferee;

(4) A transfer is not made until the debtor has acquired rights in the
asset transferred;

(5) An obligation is incurred:

(a) If oral, when it becomes effective between the parties; or

(b) If evidenced by a writing, when the writing executed by the obligor
is delivered to or for the benefit of the obligee. (L. 1992 S.B. 448)

1. In an action for relief against a transfer or obligation
under sections 428.005 to 428.059, a creditor, subject to the limitations
in section 428.044, may obtain:

(1) Avoidance of the transfer or obligation to the extent necessary to
satisfy the creditor's claim;

(2) An attachment or other provisional remedy against the asset
transferred or other property of the transferee in accordance with the
procedure prescribed by applicable laws of this state;

(3) Subject to applicable principles of equity and in accordance with
applicable rules of civil procedure,

(a) An injunction against further disposition by the debtor or a
transferee, or both, of the asset transferred or of other property;

(b) Appointment of a receiver to take charge of the asset transferred or
of other property of the transferee; or

(c) Any other relief the circumstances may require.

2. If a creditor has obtained a judgment on a claim against the debtor,
the creditor, if the court so orders, may levy execution on the asset
transferred or its proceeds. (L. 1992 S.B. 448)

1. A transfer or obligation is not voidable under subdivision
(1) of subsection 1 of section 428.024 against a person who took in good
faith and for a reasonably equivalent value or against any subsequent
transferee or obligee.

2. Except as otherwise provided in this section, to the extent a transfer
is voidable in an action by a creditor under subdivision (1) of
subsection 1 of section 428.039, the creditor may recover judgment for
the value of the asset transferred, as adjusted under subsection 3 of
this section or the amount necessary to satisfy the creditor's claim,
whichever is less. The judgment may be entered against:

(1) The first transferee of the asset or the person for whose benefit the
transfer was made; or

(2) Any subsequent transferee other than a good-faith transferee who took
for value or from any subsequent transferee.

3. If the judgment under subsection 2 of this section is based upon the
value of the asset transferred, the judgment must be for an amount equal
to the value of the asset at the time of the transfer, subject to
adjustment as the equities may require.

4. Notwithstanding voidability of a transfer or an obligation under
sections 428.005 to 428.059, a good-faith transferee or obligee is
entitled, to the extent of the value given the debtor for the transfer or
obligation, to:

(1) A lien on or a right to retain any interest in the asset transferred;

(2) Enforcement of any obligation incurred; or

(3) A reduction in the amount of the liability on the judgment.

5. A transfer is not voidable under subdivision (2) of subsection 1 of
section 428.024 or section 428.029 if the transfer results from:

(1) Termination of a lease upon default by the debtor when the
termination is pursuant to the lease and applicable law; or

(2) Enforcement of a security interest in compliance with sections
400.9-101 to 400.9-507, RSMo.

6. A transfer is not voidable under subsection 2 of section 428.029:

(1) To the extent the insider gave new value to or for the benefit of the
debtor after the transfer was made unless the new value was secured by a
valid lien;

(2) If made in the ordinary course of business or financial affairs of
the debtor and the insider; or

(3) If made pursuant to a good-faith effort to rehabilitate the debtor
and the transfer secured present value given for that purpose as well as
an antecedent debt of the debtor. (L. 1992 S.B. 448)

A claim for relief or cause of action with respect to a
fraudulent transfer or obligation under sections 428.005 to 428.059 is
extinguished unless action is brought:

(1) Under subdivision (1) of subsection 1 of section 428.024, within four
years after the transfer was made or the obligation was incurred or, if
later, within one year after the transfer or obligation was or could
reasonably have been discovered by the claimant;

(2) Under subdivision (2) of subsection 1 of section 428.024 or
subsection 1 of section 428.029, within four years after the transfer was
made or the obligation was incurred; or

(3) Under subsection 2 of section 428.029, within one year after the
transfer was made or the obligation was incurred. (L. 1992 S.B. 448)

Unless displaced by the provisions of sections 428.005 to
428.059, the principles of law and equity, including the law merchant and
the law relating to principal and agent, estoppel, laches, fraud,
misrepresentation, duress, coercion, mistake, insolvency, or other
validating or invalidating cause, supplement its provisions. (L. 1992
S.B. 448)

Sections 428.005 to 428.059 shall be applied and construed to
effectuate its general purpose to make uniform the law with respect to
the subject of sections 428.005 to 428.059 among states enacting it. (L.
1992 S.B. 448)

1. For the purposes of sections 428.105 to 428.135:

(1) "Court" is the United States Supreme Court, Federal Courts of Appeal,
Federal District Courts, Federal Magistrates, Federal Administrative
Courts, Missouri supreme court, Missouri courts of appeal, Missouri
circuit courts, and Missouri associate circuit courts but shall not
include municipal courts;

(2) "Filing officer" is the secretary of state, the recorder of deeds of
any county, the circuit clerk of any county or any public official or
authorized employee required by law to accept for filing and keep as a
public record any lien, deed, instrument, judgment or other document,
whether in paper, electronic or other form, required to be filed or
recorded under the laws of this state;

(3) "Nonconsensual common law lien" is a document that purports to assert
a lien against the assets, real or personal, of any person and that,
regardless of any self-description:

(a) Is not expressly provided for by a specific state or federal statute;

(b) Does not depend upon the consent of the owner of the property
affected or the existence of a contract for its existence; and

(c) Is not an equitable or constructive lien imposed by a state or
federal court of competent jurisdiction.

2. Nothing in sections 428.105 to 428.135 shall be construed to create a
lien or interest in property not otherwise existing under state or
federal law.

3. Nothing in sections 428.105 to 428.135 shall be construed to permit a
municipal court to create a lien or interest in property not otherwise
existing under state or federal law. (L. 1996 S.B. 869 § D-1)

1. Any filing officer may reject for filing or recording any
nonconsensual common law lien. This section shall not be construed to
permit rejection of a document that is shown to be authorized by
contract, lease or statute or imposed by a state or federal court of
competent jurisdiction or filed by a licensed attorney, a financial
institution including, but not limited to, any commercial bank, savings
and loan association or credit union or a Missouri state licensed
mortgage company or mortgage broker.

2. If a nonconsensual common law lien has been accepted for filing, the
filing officer shall accept for filing a sworn notice of invalid lien on
a form provided by the filing officer signed and submitted by the person
against whom such lien was filed or such person's attorney. The form
shall be captioned "Notice of Invalid Lien" and shall state the name and
address of the person on whose behalf such notice is filed, the name and
address of the lien claimant and a clear reference to the document or
documents the person believes constitute a nonconsensual common law lien.
A copy of the notice of invalid lien shall be mailed by the filing
officer to the lien claimant at the lien claimant's last known address
within one business day. No filing officer, county or the state shall be
liable for the acceptance for filing of a nonconsensual common law lien,
nor for the acceptance for filing of a sworn notice of invalid lien
pursuant to this subsection. (L. 1996 S.B. 869 § D-2)

Any person who attempts to file a lien against real or personal
property that is rejected pursuant to subsection 1 of section 428.110 may
petition the circuit court of the county of the filing officer that
rejected such lien for an order, which may be granted ex parte, directing
the filing officer to file or record the lien pending a hearing on
whether the lien constitutes a nonconsensual common law lien. The lien
claimant shall appear before the court as the petitioner within ten
business days following the date of service of the petition and order on
the filing officer, and show cause, if any, why the lien should not be
declared void and other relief provided for by section 428.125 should not
be granted. The petition shall state the grounds upon which relief is
requested, and shall be supported by the affidavit of the petitioner or
the petitioner's attorney setting forth a concise statement of the facts
upon which the claim for relief is based. (L. 1996 S.B. 869 § D-3)

Any person who has real or personal property or an interest
therein, which is subject to a recorded nonconsensual common law lien,
who believes such lien is invalid, may petition the circuit court of the
county in which the lien has been recorded or filed for an order, which
may be granted ex parte, directing the lien claimant to appear before the
court within ten business days following the date of service of the
petition and order on the lien claimant, and show cause, if any, why the
claim of lien should not be declared void and other relief provided for
by section 428.125 should not be granted. The petition shall state the
grounds upon which relief is requested, and shall be supported by the
affidavit of the petitioner or the petitioner's attorney setting forth a
concise statement of the facts upon which the claim for relief is based.
(L. 1996 S.B. 869 § D-4)

1. Any order rendered pursuant to section 428.115 or 428.120
shall clearly state that if the lien claimant fails to appear at the time
and place noted, the claim of lien shall be declared void ab initio and
released and that the lien claimant shall be ordered to pay the costs
incurred by any other party to the proceeding, including reasonable
attorney's fees.

2. If, following a hearing on the matter, the court determines that the
document at issue is a nonconsensual common law lien, the court shall
issue an order declaring the lien void ab initio, releasing the lien and
awarding costs and reasonable attorney's fees to the prevailing party.

3. If the court determines that the claim of lien is valid, the court
shall issue an order so stating and may award costs and reasonable
attorney's fees to the prevailing party.

4. A certified copy of any order rendered pursuant to this section shall
be filed by the circuit clerk in the office of the appropriate filing
officer. (L. 1996 S.B. 869 § D-5)

Filing officers and any employees thereof, acting in the scope
of employment, shall not be liable for damages pursuant to sections
428.105 to 428.125 and, except as otherwise provided by law, shall not be
required to defend decisions to accept or reject any documents. (L. 1996
S.B. 869 § D-6)

Any person who records or files in the office of a filing
officer:

(1) Any document purporting to create a nonconsensual common law lien
against real or personal property; or

(2) A notice of invalid lien pursuant to subsection 2 of section 428.110
with respect to a valid lien and which the filer knew to be false at the
time of filing;

shall be liable to the damaged party for actual damages or five thousand
dollars, whichever is greater plus costs and reasonable attorney's fees.
(L. 1996 S.B. 869 § D-7)

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