242.02(2)
(2) 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.
242.02(3)
(3) A debtor who is generally not paying debts as they become due is presumed to be insolvent.
242.02(4)
(4) A partnership is insolvent under
sub. (2) 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.
242.02 History
History: 1987 a. 192.
242.03(1)(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.
242.03(2)
(2) For the purposes of
ss. 242.04 (1) (b) and
242.05, 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.
242.03(3)
(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.
242.03 History
History: 1987 a. 192.
242.04
242.04
Transfers fraudulent as to present and future creditors. 242.04(1)(1) A transfer made or obligations 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:
242.04(1)(a)
(a) With actual intent to hinder, delay or defraud any creditor of the debtor; or
242.04(1)(b)
(b) Without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor:
242.04(1)(b)1.
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
242.04(1)(b)2.
2. Intended to incur, or believed or reasonably should have believed that the debtor would incur, debts beyond the debtor's ability to pay as they became due.
242.04(2)
(2) In determining actual intent under
sub. (1) (a), consideration may be given, among other factors, to whether:
242.04(2)(a)
(a) The transfer or obligation was to an insider;
242.04(2)(b)
(b) The debtor retained possession or control of the property transferred after the transfer;
242.04(2)(c)
(c) The transfer or the obligation was disclosed or concealed;
242.04(2)(d)
(d) Before the transfer was made or the obligation was incurred, the debtor had been sued or threatened with suit;
242.04(2)(e)
(e) The transfer was of substantially all the debtor's assets;
242.04(2)(h)
(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;
242.04(2)(i)
(i) The debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred;
242.04(2)(j)
(j) The transfer occurred shortly before or shortly after a substantial debt was incurred; and
242.04(2)(k)
(k) The debtor transferred the essential assets of the business to a lienor who transferred the assets to an insider of the debtor.
242.04 History
History: 1987 a. 192.
242.04 Annotation
Federal law does not preclude a labor union from bringing a state action for an alleged fraudulent conveyance by an employer when the claim does not require substantial interpretation of a collective bargaining agreement. International. Machinist Association v. United States Can Co.,
150 Wis. 2d 479,
441 N.W.2d 710 (1989).
242.05
242.05
Transfers fraudulent as to present creditors. 242.05(1)(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.
242.05(2)
(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.
242.05 History
History: 1987 a. 192.
242.05 Annotation
Intent to defraud need not be proved under this section. DeWitt, Porter v. Kovalic,
991 F.2d 1243 (1993).
242.06
242.06
When transfer is made or obligation is incurred. For the purposes of this chapter:
242.06(1)(a)
(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.
242.06(1)(b)
(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 other than under this chapter that is superior to the interest of the transferee.
242.06(2)
(2) If applicable law permits the transfer to be perfected as provided in
sub. (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.
242.06(3)
(3) If applicable law does not permit the transfer to be perfected as provided in
sub. (1), the transfer is made when it becomes effective between the debtor and the transferee.
242.06(4)
(4) A transfer is not made until the debtor has acquired rights in the asset transferred.
242.06(5)(a)
(a) If oral, when it becomes effective between the parties.
242.06(5)(b)
(b) If evidenced by a writing, when the writing executed by the obligor is delivered to or for the benefit of the obligee.
242.06 History
History: 1987 a. 192.
242.06 Annotation
Sub. (1) requires viewing a transfer exclusively from the perspective of the creditor and not a transferee. What the transferees may have believed regarding with whom they were dealing is irrelevant under sub. (1). The good-faith defense under s. 242.08 (1) applies only to claims made under s. 242.04 (1) (a), not to claims under this section. Badger State Bank v. Taylor,
2004 WI 128,
276 Wis. 2d 312,
688 N.W.2d 439,
03-0750.
242.07
242.07
Remedies of creditors. 242.07(1)
(1) In an action for relief against a transfer or obligation under this chapter, a creditor, subject to the limitations in
s. 242.08, may obtain any of the following:
242.07(1)(a)
(a) Avoidance of the transfer or obligation to the extent necessary to satisfy the creditor's claim.
242.07(1)(b)
(b) An attachment or other provisional remedy against the asset transferred or other property of the transferee in accordance with
chs. 810 to
813.
242.07(1)(c)
(c) Subject to applicable principles of equity and in accordance with applicable rules of civil procedure:
242.07(1)(c)1.
1. An injunction against further disposition by the debtor or a transferee, or both, of the asset transferred or of other property;
242.07(1)(c)2.
2. Appointment of a receiver to take charge of the asset transferred or of other property of the transferee; or
242.07(2)
(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.
242.07 History
History: 1987 a. 192.
242.07 Annotation
Nothing in ch. 242 changes the principle of law that compensatory damages are a threshold requirement for awarding punitive damages or otherwise permits a punitive damages award. Rescission under sub. (1) is an equitable remedy and does not constitute compensatory damages. C & A Investments v. Kelly,
2010 WI App 151,
330 Wis. 2d 223,
792 N.W.2d 644,
09-2420.
242.08
242.08
Defenses, liability and protection of transferee. 242.08(1)(1) A transfer or obligation is not voidable under
s. 242.04 (1) (a) against a person who took in good faith and for a reasonably equivalent value or against any subsequent transferee or obligee.
242.08(2)
(2) Except as otherwise provided in this section, to the extent a transfer is voidable in an action by a creditor under
s. 242.07 (1) (a), the creditor may recover judgment for the value of the asset transferred, as adjusted under
sub. (3), or the amount necessary to satisfy the creditor's claim, whichever is less. The judgment may be entered against any of the following:
242.08(2)(a)
(a) The first transferee of the asset or the person for whose benefit the transfer was made.
242.08(2)(b)
(b) Any subsequent transferee other than a good faith transferee who took for value or from any subsequent transferee.
242.08(3)
(3) If the judgment under
sub. (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.
242.08(4)
(4) Notwithstanding voidability of a transfer or an obligation under this chapter, a good-faith transferee or obligee is entitled, to the extent of the value given the debtor for the transfer or obligation, to any of the following:
242.08(4)(a)
(a) A lien on or a right to retain any interest in the asset transferred.
242.08(4)(c)
(c) A reduction in the amount of the liability on the judgment.
242.08(5)(a)
(a) Termination of a lease upon default by the debtor when the termination is pursuant to the lease and applicable law.
242.08(5)(b)
(b) Enforcement of a security interest in compliance with
ch. 409.
242.08(6)(a)
(a) To the extent that 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;
242.08(6)(b)
(b) If made in the ordinary course of business or financial affairs of the debtor and the insider; or
242.08(6)(c)
(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.
242.08 History
History: 1987 a. 192.
242.09
242.09
Statute of limitation. Actions under this chapter are barred as provided in
s. 893.425.
242.09 History
History: 1987 a. 192.
242.10
242.10
Supplementary provisions. Unless displaced by 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 this chapter.
242.10 History
History: 1987 a. 192.
242.11
242.11
Uniformity of application and construction. This chapter shall 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.
242.11 History
History: 1987 a. 192.
