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62 Am. Bankr. L.J. 87 (1988)
The Uniform Fraudulent Transfer Act: An Introductory Critique

handle is hein.journals/ambank62 and id is 97 raw text is: The Uniform Fraudulent Transfer Act: An Introductory Critique by Michael L. Cook* Richard E. Mendales * * I. INTRODUCTION The Uniform Fraudulent 'Tansfer Act (UFTA) was approved by the National Conference of Commissioners on Uniform State Laws in 1984 to replace the present Uniform Fraudulent Conveyance Act (UFCA). To date, sixteen states, including California, Florida and Texas, have adopted the UFTA. The new statute, particularly in view of its widespread adoption, can have great impact not only on litigators, but also on commercial lawyers generally, particularly those engaged in leveraged acquisitions, asset sales, and in disputes with the Internal Revenue Service. The UFTA has borrowed heavily from the federal Bankruptcy Code (the Code). Unfortunately, however, uniformity between the UFTA and the Code has not been achieved. Significant differences still exist, as will be shown here. A statutory cross-reference, covering key provisions of applicable federal and state law, is set forth in the appendix to this article. The UFTA contains important changes from the UFCA, both in struc- ture and in substance. The important changes include new provisions mak- ing transfers to insiders voidable; generally enhanced creditors' remedies against transferees; a new, generally applicable statute of limitations; a new, more objective definition of insolvency than the one in the Bankruptcy Code (sec- tion 101(31)); elimination of the good faith requirement contained in the UFCA's definition of fair consideration; a statutory enumeration of badges *Partner, Skadden, Arps, Slate, Meagher & Flom, New York; Adjunct Professor, New York Univer- sity School of Law; New York University School of Law, J.D., 1968; Columbia University, A.B., 1965. **Associate, Skadden, Arps, Slate, Meagher & Flom, New York; Yale University School of Law, 1981; University of Chicago, A.M., 1970, and A.B., 1969. 'As of August 13, 1987, Arkansas, California, Florida, Hawaii, Idaho, Maine, Nevada, New Hamp- shire, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Texas, Washington, and West Virginia had adopted the UFTA. There are some local variations, most notably in California. CAL. CrV. CODE §§ 3439-3439.11 omits UFTA § 5(b), dealing with insider preferences, and modifies UFTA § 9(c) to provide that a cause of action based on a fraudulent transfer is extinguished if no action is brought or levy made within seven years after the transfer was made or the obligation was incurred.

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