Monday, March 23, 2015
Kentucky Moves from the Elizabethan Age to the 21st Century: The Kentucky Uniform Voidable Transactions Act
Kentucky Moves from the Elizabethan Age to the 21st Century:
The Kentucky Uniform Voidable Transactions Act
Kentucky's existing statute on fraudulent transfers was written in 1855 and is itself based upon the Statute of 13 Elizabeth, a statute composed during the reign of Elizabeth I (i.e., the daughter of Henry VIII and Anne Boleyn). To say the least the statute is archaic. Further, it is significantly out of step with the fraudulent conveyance laws of most states and, likely of greater import, with the Bankruptcy Code.
The only comprehensive review of this statute is an article written by Professor Doug Michael of the University of Kentucky College of Law. See Douglas C. Michael, The Past and Future of Kentucky's Fraudulent Transfer and Preference Laws, 86 Kentucky Law Journal 937 (1997-98). Therein he wrote:
“Kentucky has a unique and antique collection of laws governing fraudulent transfers and preferences.”
That is about to change. The 2015 Kentucky General Assembly approved Senate Bill 204, enacting in Kentucky the Uniform Voidable Transactions Act. This bill was signed by Governor Beshear last Friday. This Uniform Act, itself updating the Uniform Fraudulent Transactions Act, will bring Kentucky law into sync with the other states that enact this Act. Also, based upon the significant similarities between this Act and the predecessor Uniform Fraudulent Transfers Act, greater consistency will be achieved with the other states. In addition, in that the UVTA is meant to conform to modern bankruptcy law, Kentucky law and that federal law will now be more consistent.
The new Voidable Transactions Act has an effective date of January 1, 2016. HERE IS A LINK to the new statute.