Monday, January 4, 2016

The Kentucky Uniform Voidable Transactions Act Is Now In Effect

The Kentucky Uniform Voidable Transactions Act Is Now In Effect

      The 2015 Kentucky General Assembly approved the Kentucky Uniform Voidable Transactions Act, and it is now in effect.  HERE IS A LINK to the new statute.

      This Uniform Act, itself updating the Uniform Fraudulent Transactions Act, brings 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.

      Kentucky's now former statute on fraudulent transfers was written in 1855 and was 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.

            With this new statute in effect, Kentucky is no longer unique – in this case, that’s a good thing.

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