Senate Commerce Committee Statement to Senate, No. 3171 - Uniform Voidable Transactions Act (State of New Jersey)

Summary

Senate Bill No. 3171 is the subject of this Senate Commerce Committee statement to Senate, No. 3171 with committee amendments, State of New Jersey, dated January 21, 2021. The committee reports the bill favorably; as amended, it makes changes to the "Uniform Fraudulent Transfer Act" and renames that act the "Uniform Voidable Transactions Act." The statement says the bill recategorizes certain transactions by debtors as "voidable" rather than "fraudulent" and provides that a debtor generally not paying debts as they become due is presumed to be insolvent. It states that the committee amended the bill to replace a reference to the former act title and to repeal certain outdated provisions concerning fraudulent conveyances, and that the bill is identical to Assembly Bill No. 3384.

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     SENATE COMMERCE COMMITTEE

                    STATEMENT TO

                  SENATE, No. 3171
                   with committee amendments



 STATE OF NEW JERSEY
                    DATED: JANUARY 21, 2021

    The Senate Commerce Committee reports favorably and with
committee amendments Senate Bill No. 3171.
    As amended, this bill revises the “Uniform Fraudulent Transfer
Act” by making changes approved and recommended for enactment in
all states by the Uniform Law Commission, and in New Jersey by the
New Jersey Law Revision Commission. The bill provides that the
“Uniform Fraudulent Transfer Act” shall be known, on or after the
bill’s effective date, as the “Uniform Voidable Transactions Act.”
    Generally, the bill recategorizes certain transactions by debtors as
“voidable” rather than “fraudulent” to more accurately reflect the
nature of the transactions.
    The bill establishes a “preponderance of evidence” standard,
applicable to various provisions in the act, including providing that a
creditor has the burden of proving the elements of a voidable
transaction claim by a preponderance of the evidence.
    The bill provides that a debtor that is generally not paying debts as
they become due, other than as a result of a bona fide dispute, is
presumed to be insolvent. The bill removes the requirement that the
net worth of a general partner must be included in determining the
insolvency of a partnership. The bill also makes certain revisions to
provisions relating to the defenses available to a transferee or debtors.
    The bill also provides statutory rules for determining a debtor’s
location, and provides guidance to address conflict of law issues.
    Moreover, the bill provides that the act generally modifies, limits,
and supersedes the “Electronic Signatures in Global and National
Commerce Act,” 15 U.S.C. s.7001 et seq., but with certain exceptions
as noted in the bill.
    Finally, the bill replaces references to the “Uniform Fraudulent
Transfer Act” or the former “Uniform Fraudulent Conveyance Law”
with references to the “Uniform Voidable Transactions Act,” and also
repeals outdated sections of the law concerning fraudulent
conveyances.
    As amended and reported, this bill is identical to Assembly Bill
No. 3384, as amended and reported by the Senate Commerce
Committee on January 21, 2021.
                                2

COMMITTEE AMENDMENTS:
   The committee amended the bill to:
   (1) replace a reference to the “Uniform Fraudulent Transfer Act”
with a reference to the “Uniform Voidable Transactions Act”; and
   (2) repeal certain outdated provisions of law concerning fraudulent
conveyances.


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