LRB-4219/1
ARG:skw
2023 - 2024 LEGISLATURE
September 20, 2023 - Introduced by Senators Wimberger and Ballweg,
cosponsored by Representatives Tusler and O'Connor. Referred to
Committee on Financial Institutions and Sporting Heritage.
SB450,1,10 1An Act to repeal 242.02 (4); to renumber 242.08 (2) (a); to renumber and
2amend
242.08 (2) (b); to amend chapter 242 (title), 242.01 (3), 242.01 (9),
3242.01 (12), 242.02 (2), 242.02 (3), 242.04 (title), 242.04 (1) (intro.), 242.05
4(title), 242.05 (1), 242.05 (2), 242.06 (5) (b), 242.07 (1) (b), 242.08 (title), 242.08
5(1), 242.08 (2) (intro.), 242.08 (5) (b), 402.402 (3) (b), 411.308 (2) (b), 705.07 (2),
6815.18 (10) and 893.425; and to create 242.01 (6m), 242.01 (8m), 242.01 (10m),
7242.01 (11m), 242.04 (3), 242.05 (3), 242.08 (2) (am) 2. b. and (bm), 242.08 (7)
8and (8), 242.094, 242.096, 242.12 and 242.13 of the statutes; relating to:
9adopting modifications to, and renaming, the Uniform Fraudulent Transfer
10Act.
Analysis by the Legislative Reference Bureau
This bill adopts the Uniform Law Commission's 2014 modifications to the
Uniform Fraudulent Transfer Act, including its renaming as the Uniform Voidable
Transactions Law.
Current law incorporates the Uniform Fraudulent Transfer Act (1984), adopted
in this state in 1988. Under current law, a creditor may challenge certain transfers

of property or obligations incurred by a debtor that may deprive the creditor of assets
that would otherwise be available to satisfy debts if the debtor is or is about to become
insolvent, such as the transfer of the debtor's assets to a family member or corporate
insider. A “creditor” is any person who has a claim and a “debtor” is any person who
is liable on a claim. A “claim” is a right to payment, whether it arises by contract,
tort, or otherwise, and a “debt” means liability on a claim. There are four basic
situations in which the creditor may challenge a transfer made or obligation incurred
by the debtor (hereafter referred to as voidable transactions):
1. If the transfer is made or obligation incurred by the debtor to intentionally
hinder, delay, or defraud the creditor.
2. If the debtor transfers property or incurs the obligation without receiving a
reasonably equivalent value in exchange, and the debtor engages in business or a
transaction for which the debtor's remaining assets are unreasonably small or the
debtor intends to incur debts beyond the debtor's ability to pay as they become due.
3. If there is an existing creditor-debtor relationship, the debtor makes a
transfer or incurs an obligation without receiving a reasonably equivalent value in
exchange, and the debtor was insolvent at that time or the debtor became insolvent
as a result of the transfer or obligation. 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. A debtor who is
generally not paying debts as they become due is presumed to be insolvent.
4. If the debtor makes a transfer to an insider for a preexisting debt, the debtor
was insolvent at the time of the transfer, and the insider had reasonable cause to
believe that the debtor was insolvent. “Insider” is a defined term and includes
certain relatives of an individual debtor and officers and directors of a corporate
debtor.
Current law specifies various remedies available to a creditor if a voidable
transaction has occurred. These remedies include the avoidance of the transfer or
obligation to the extent necessary to satisfy the creditor's claim, attachment against
the asset transferred or other property of the person to whom the asset was
transferred, an injunction, and appointment of a receiver.
The bill adopts the ULC's 2014 modifications to the uniform act, including the
following:
1. The bill renames the provisions of the act to be the Uniform Voidable
Transactions Law and replaces the term “fraudulent” with “voidable” in various
provisions. The ULC specified that these changes were not intended to have
substantive effect and were made to more accurately convey the effect of current law,
which frequently uses the term “fraudulent” but does not actually require fraudulent
activity as a condition to its application.
2. The bill creates provisions that specify, for claims and defenses related to
voidable transactions, which party has the burden of proof and establishes the
standard of proof as a preponderance of the evidence.
3. The bill creates a choice-of-law rule for courts to determine which state's
voidable transactions law applies in a given case. Under the bill, a court must apply
the law of the state where the debtor is located at the time the transfer is made or
obligation incurred.

4. The bill eliminates a provision that applies a different standard for
determining insolvency for a partnership, so that the general insolvency standard
applies to partnerships.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB450,1 1Section 1. Chapter 242 (title) of the statutes is amended to read:
SB450,3,22 CHAPTER 242
SB450,3,33 UNIFORM FRAUDULENT TRANSFER ACT
SB450,3,4 4voidable transactions law
SB450,2 5Section 2. 242.01 (3) of the statutes is amended to read:
SB450,3,96 242.01 (3) “Claim" “ Claim,” except as used in “claim for relief,” means a right
7to payment, whether or not the right is reduced to judgment, liquidated,
8unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal,
9equitable, secured or unsecured.
SB450,3 10Section 3. 242.01 (6m) of the statutes is created to read:
SB450,3,1211 242.01 (6m) “Electronic" means relating to technology having electrical,
12digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.
SB450,4 13Section 4. 242.01 (8m) of the statutes is created to read:
SB450,3,1414 242.01 (8m) “Organization” means a person other than an individual.
SB450,5 15Section 5. 242.01 (9) of the statutes is amended to read:
SB450,3,2016 242.01 (9) “Person" means an individual, estate, partnership, corporation,
17limited liability company, association, organization, trust, business or nonprofit
18entity, public corporation,
government or governmental subdivision or, agency,
19business trust, estate, trust or instrumentality, or any other legal or commercial
20entity.
SB450,6
1Section 6. 242.01 (10m) of the statutes is created to read:
SB450,4,42 242.01 (10m) “Record" means information that is inscribed on a tangible
3medium or that is stored in an electronic or other medium and is retrievable in
4perceivable form.
SB450,7 5Section 7. 242.01 (11m) of the statutes is created to read:
SB450,4,76 242.01 (11m) “Sign" means, with present intent to authenticate or adopt a
7record, any of the following:
SB450,4,88 (a) To execute or adopt a tangible symbol.
SB450,4,109 (b) To attach to or logically associate with the record an electronic symbol,
10sound, or process.
SB450,8 11Section 8. 242.01 (12) of the statutes is amended to read:
SB450,4,1512 242.01 (12) “Transfer" means every mode, direct or indirect, absolute or
13conditional, voluntary or involuntary, of disposing of or parting with an asset or an
14interest in an asset, and includes payment of money, release, lease , license, and
15creation of a lien or other encumbrance.
SB450,9 16Section 9. 242.02 (2) of the statutes is amended to read:
SB450,4,1817 242.02 (2) A debtor is insolvent if, at a fair valuation, the sum of the debtor's
18debts is greater than all the sum of the debtor's assets at a fair valuation.
SB450,10 19Section 10. 242.02 (3) of the statutes is amended to read:
SB450,4,2420 242.02 (3) A debtor who is generally not paying the debtor's debts as they
21become due other than as a result of a bona fide dispute is presumed to be insolvent.
22The presumption imposes on the party against which the presumption is directed the
23burden of proving that the nonexistence of insolvency is more probable than its
24existence.
SB450,11 25Section 11. 242.02 (4) of the statutes is repealed.
SB450,12
1Section 12. 242.04 (title) of the statutes is amended to read:
SB450,5,3 2242.04 (title) Transfers fraudulent Transfer or obligation voidable as
3to present
and or future creditors creditor .
SB450,13 4Section 13. 242.04 (1) (intro.) of the statutes is amended to read:
SB450,5,85 242.04 (1) (intro.) A transfer made or obligations obligation incurred by a
6debtor is fraudulent voidable as to a creditor, whether the creditor's claim arose
7before or after the transfer was made or the obligation was incurred, if the debtor
8made the transfer or incurred the obligation:
SB450,14 9Section 14. 242.04 (3) of the statutes is created to read:
SB450,5,1110 242.04 (3) A creditor making a claim for relief under sub. (1) has the burden
11of proving the elements of the claim for relief by a preponderance of the evidence.
SB450,15 12Section 15. 242.05 (title) of the statutes is amended to read:
SB450,5,14 13242.05 (title) Transfers fraudulent Transfer or obligation voidable as
14to present
creditors creditor .
SB450,16 15Section 16. 242.05 (1) of the statutes is amended to read:
SB450,5,2116 242.05 (1) A transfer made or obligation incurred by a debtor is fraudulent
17voidable as to a creditor whose claim arose before the transfer was made or the
18obligation was incurred if the debtor made the transfer or incurred the obligation
19without receiving a reasonably equivalent value in exchange for the transfer or
20obligation and the debtor was insolvent at that time or the debtor became insolvent
21as a result of the transfer or obligation.
SB450,17 22Section 17. 242.05 (2) of the statutes is amended to read:
SB450,6,223 242.05 (2) A transfer made by a debtor is fraudulent voidable as to a creditor
24whose claim arose before the transfer was made if the transfer was made to an

1insider for an antecedent debt, the debtor was insolvent at that time and the insider
2had reasonable cause to believe that the debtor was insolvent.
SB450,18 3Section 18. 242.05 (3) of the statutes is created to read:
SB450,6,64 242.05 (3) Subject to s. 242.02 (3), a creditor making a claim for relief under
5sub. (1) or (2) has the burden of proving the elements of the claim for relief by a
6preponderance of the evidence.
SB450,19 7Section 19. 242.06 (5) (b) of the statutes is amended to read:
SB450,6,98 242.06 (5) (b) If evidenced by a writing record, when the writing executed
9record signed by the obligor is delivered to or for the benefit of the obligee.
SB450,20 10Section 20. 242.07 (1) (b) of the statutes is amended to read:
SB450,6,1311 242.07 (1) (b) An attachment or other provisional remedy against the asset
12transferred or other property of the transferee in accordance with if available under
13chs. 810 to 813 or other applicable law.
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