This chapter may be cited as the Uniform
Fraudulent Transfer Act.
(Added to NRS by 1987, 8)
As used in this chapter, unless the
context otherwise requires:
1. “Affiliate” means:
(a) A person who 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 who holds the securities:
(1) As a fiduciary or agent without sole discretionary power
to vote the securities; or
(2) Solely to secure a debt, if the person has not exercised
the power to vote;
(b) 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 who 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 who
holds the securities:
(1) As a fiduciary or agent without sole power to vote the
securities; or
(2) 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” means 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 or as
community property to the extent it is not subject to process by a
creditor holding a claim against only one tenant.
3. “Claim” means 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” means a person who has a claim.
5. “Debt” means liability on a claim.
6. “Debtor” means a person who is liable on a claim.
7. “Insider” includes:
(a) If the debtor is a natural person:
(1) A relative of the debtor or of a general partner of the
debtor;
(2) A partnership in which the debtor is a general partner;
(3) A general partner in a partnership described in
subparagraph (2); and
(4) A corporation of which the debtor is a director, officer
or person in control;
(b) If the debtor is a corporation:
(1) A director of the debtor;
(2) An officer of the debtor;
(3) A person in control of the debtor;
(4) A partnership in which the debtor is a general partner;
(5) A general partner in a partnership described in
subparagraph (4); and
(6) A relative of a general partner, director, officer or
person in control of the debtor;
(c) If the debtor is a partnership:
(1) A general partner in the debtor;
(2) A relative of a general partner in, a general partner
of, or a person in control of the debtor;
(3) Another partnership in which the debtor is a general
partner;
(4) A general partner in a partnership described in
subparagraph (3); and
(5) 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” means 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 and a statutory
lien.
9. “Person” includes a government and a governmental subdivision
or agency.
10. “Property” means anything that may be the subject of ownership.
11. “Relative” means a natural person related by consanguinity
within the third degree as determined by the common law, a spouse, or a
natural person related to a spouse within the third degree as so
determined, and includes a natural person in an adoptive relationship
within the third degree.
12. “Transfer” means 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” means a lien that is effective against the holder
of a judicial lien subsequently obtained by legal or equitable process or
proceedings.
(Added to NRS by 1987, 8)
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 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 this chapter.
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.
(Added to NRS by 1987, 10)
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 paragraph (b) of subsection 1 of NRS
112.180 and NRS 112.190 , 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.
(Added to NRS by 1987, 710)
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:
(a) With actual intent to hinder, delay or defraud any creditor of
the debtor; or
(b) Without receiving a reasonably equivalent value in exchange for
the transfer or obligation, and the debtor:
(1) 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
(2) 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 paragraph (a) of subsection
1, consideration may be given, among other factors, to whether:
(a) The transfer or obligation was to an insider;
(b) The debtor retained possession or control of the property
transferred after the transfer;
(c) The transfer or obligation was disclosed or concealed;
(d) Before the transfer was made or obligation was incurred, the
debtor had been sued or threatened with suit;
(e) The transfer was of substantially all the debtor’s assets;
(f) The debtor absconded;
(g) The debtor removed or concealed assets;
(h) 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;
(i) The debtor was insolvent or became insolvent shortly after the
transfer was made or the obligation was incurred;
(j) The transfer occurred shortly before or shortly after a
substantial debt was incurred; and
(k) The debtor transferred the essential assets of the business to
a lienor who transferred the assets to an insider of the debtor.
(Added to NRS by 1987, 11)
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.
(Added to NRS by 1987, 11)
For the purposes of this chapter:
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 this
chapter that is superior to the interest of the transferee.
2. If applicable law permits the transfer to be perfected as
provided in subsection 1 and the transfer is not so perfected before the
commencement of an action for relief under this chapter, 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 subsection 1, 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.
(Added to NRS by 1987, 12)
1. In an action for relief against a transfer or obligation under
this chapter, a creditor, subject to the limitations in NRS 112.220
, may obtain:
(a) Avoidance of the transfer or obligation to the extent necessary
to satisfy the creditor’s claim;
(b) An attachment or garnishment against the asset transferred or
other property of the transferee pursuant to NRS 31.010 to 31.460 ,
inclusive; and
(c) Subject to applicable principles of equity and in accordance
with applicable rules of civil procedure:
(1) An injunction against further disposition by the debtor
or a transferee, or both, of the asset transferred or of other property;
(2) Appointment of a receiver to take charge of the asset
transferred or of other property of the transferee; or
(3) 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.
(Added to NRS by 1987, 12)
1. A transfer or obligation is not voidable under paragraph (a) of
subsection 1 of NRS 112.180 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 paragraph (a) of
subsection 1 of NRS 112.210 , 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:
(a) The first transferee of the asset or the person for whose
benefit the transfer was made; or
(b) Any subsequent transferee other than a transferee who took in
good faith for value or from any subsequent transferee.
3. If the judgment under subsection 2 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 this chapter, a transferee or obligee who took in good faith is
entitled, to the extent of the value given the debtor for the transfer or
obligation, to:
(a) A lien on or a right to retain any interest in the asset
transferred;
(b) Enforcement of any obligation incurred; or
(c) A reduction in the amount of the liability on the judgment.
5. A transfer is not voidable under paragraph (b) of subsection 1
of NRS 112.180 or NRS 112.190 if the transfer results from:
(a) Termination of a lease upon default by the debtor when the
termination is pursuant to the lease and applicable law; or
(b) Enforcement of a security interest in compliance with NRS
104.9101 to 104.9709 , inclusive.
6. A transfer is not voidable under subsection 2 of NRS 112.190
:
(a) 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;
(b) If made in the ordinary course of business or financial affairs
of the debtor and the insider; or
(c) 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.
(Added to NRS by 1987, 12; A 1999, 389 )
Except as otherwise provided
in NRS 166.170 , a claim for relief with
respect to a fraudulent transfer or obligation under this chapter is
extinguished unless action is brought:
1. Under paragraph (a) of subsection 1 of NRS 112.180 , within 4 years after the transfer was made or
the obligation was incurred or, if later, within 1 year after the
transfer or obligation was or could reasonably have been discovered by
the claimant;
2. Under paragraph (b) of subsection 1 of NRS 112.180 or subsection 1 of NRS 112.190 , within 4 years after the transfer was made or
the obligation was incurred; or
3. Under subsection 2 of NRS 112.190 , within 1 year after the transfer was made or
the obligation was incurred.
(Added to NRS by 1987, 13; A 1999, 1239 )
Unless displaced by the provisions of this chapter, 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.
(Added to NRS by 1987, 14)
NRS 112.250 Construction of chapter. This chapter must be applied
and construed to effectuate its general purpose to make uniform the law
with respect to the subject of this chapter among states enacting it.
(Added to NRS by 1987, 14)
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