casemark/fraudulent-conveyance-complaint

Fraudulent Conveyance Complaint

Drafts a litigation-ready complaint to avoid a debtor's fraudulent asset transfer and recover value for creditors under UFTA, UVTA, or state equivalents.

Quick Start

Gather from the user:

1. Creditor's claim — nature of debt, date incurred, amount, judgment status
2. Transfer details — asset description (legal description if real property), date, transferee, stated vs. actual consideration
3. Debtor financial condition — insolvency evidence (balance sheet, cash-flow, or unreasonably small capital)
4. Badges of fraud — insider relationship, retention of control, concealment, timing, consideration adequacy
5. Jurisdiction — governing statute (UFTA, UVTA, or state-specific); federal vs. state court; bankruptcy adversary proceeding

Then produce the complaint following the workflow below.

Core Workflow

1. Caption

[COURT NAME]
[DISTRICT/COUNTY]

[PLAINTIFF],
    Plaintiff,
v.
[DEBTOR-TRANSFEROR] and [TRANSFEREE],
    Defendants.

Case No. [________]
COMPLAINT FOR FRAUDULENT CONVEYANCE

Apply FRCP 10 (federal) or local rules (state).

2. Parties

| Party | Required Allegations | |---|---| | Plaintiff-creditor | Legal name, entity type, standing basis, nature and amount of debt | | Debtor-transferor | Identity, entity type, insider status if applicable | | Transferee | Identity, consideration paid, knowledge of debtor's intent | | Subsequent transferees | Downstream recipients; good-faith purchaser status if asserted |

3. Jurisdiction & Venue

| Basis | Requirements | |---|---| | Federal diversity | 28 U.S.C. § 1332 — citizenship of each party, amount > $75,000 | | Federal bankruptcy | 28 U.S.C. §§ 157, 1334 — adversary proceeding under FRBP 7001 | | State court | Jurisdictional statute + amount-in-controversy threshold | | Personal jurisdiction | Residence, principal place of business, property situs, or where transfer executed | | Venue | Defendant's residence, where cause arose, or where property located |

4. Factual Allegations

Plead in numbered paragraphs, chronologically:

1. Origin, nature, and amount of claim; date debt incurred; judgment status
2. Whether claim is pre-transfer or post-transfer (determines available theories)
3. Debtor's financial condition at time of transfer — plead all that apply:
   • Liabilities exceeded assets at fair valuation (balance sheet insolvency)
   • Unable to pay debts as due (cash-flow insolvency)
   • Transfer left debtor with unreasonably small capital
4. Transfer description: asset, date, transferee, stated consideration, fair market value
5. Badges of fraud:

| Badge | Allegation | |---|---| | Insider transfer | Relationship: family member, officer, affiliate, controlled entity | | Retention of control | Debtor continued to use, possess, or control asset post-transfer | | Concealment | Transfer not recorded, disclosed, or reported to creditors | | Substantially all assets | Scope of asset depletion relative to debtor's total estate | | Inadequate consideration | FMV vs. consideration actually received | | Timing | Transfer occurred [X days] before/after debt incurred or suit filed | | Prior pattern | History of transfers or asset-shifting |

6. Transferee's actual or constructive knowledge of debtor's fraudulent intent (if applicable)

5. Causes of Action

Count I — Actual Fraudulent Transfer

• UVTA § 4(a)(1) [VERIFY state codification]
• Elements: (1) transfer by debtor; (2) actual intent to hinder, delay, or defraud any creditor
• Incorporate badges of fraud and direct evidence of intent
• Available to present and future creditors

Count II — Constructive Fraud (Insolvency)

• UVTA § 4(a)(2) [VERIFY state codification]
• Elements: (1) transfer without reasonably equivalent value; (2) debtor insolvent at time or became insolvent as result
• Plead in the alternative to Count I

Count III — Constructive Fraud (Insider Antecedent Debt) (if applicable)

• UVTA § 5(b) [VERIFY state codification]
• Elements: (1) transfer to insider; (2) for antecedent debt; (3) debtor insolvent; (4) insider had reasonable cause to believe debtor insolvent

Additional claims (as applicable): conspiracy to defraud creditors, aiding and abetting, successor liability, lis pendens (real property — file with complaint)

6. Prayer for Relief

- [ ] Avoidance of the transfer to extent necessary to satisfy plaintiff's claim
- [ ] Recovery of transferred property or its value from transferee
- [ ] Money judgment against debtor for underlying debt (if not already obtained)
- [ ] Money judgment against transferee to extent of asset value received
- [ ] Attachment, garnishment, or receiver to preserve assets pending judgment
- [ ] Preliminary injunction against further dissipation (if imminent risk)
- [ ] Pre- and post-judgment interest at statutory rate
- [ ] Costs of suit
- [ ] Attorney's fees (if permitted by statute — verify jurisdiction)
- [ ] Such other relief as the court deems just and proper

7. Signature Block & Verification

• Attorney: name, bar number, firm, address, phone, email; FRCP 11 or state-equivalent certification
• Verification: many jurisdictions require verification for fraudulent conveyance complaints, especially when seeking provisional remedies — confirm local rules; some require notarization, others accept unsworn declaration under penalty of perjury

Pitfalls

• UFTA vs. UVTA — Most states adopted UVTA (2014) but effective dates vary. [VERIFY] current state codification before citing section numbers.
• Statute of limitations — UVTA § 9: 4 years from transfer (actual fraud); 4 years or 1 year after discovery, whichever is later (constructive fraud). [VERIFY state equivalent.]
• Bankruptcy intersection — 11 U.S.C. § 548 reaches transfers within 2 years of petition; trustee may also invoke state UFTA/UVTA via § 544(b) for longer state limitations periods.
• Good-faith defense — Transferee who took for value and in good faith may retain the transfer. Plead facts negating good faith where known; affects remedy (avoidance vs. money judgment).
• Reasonably equivalent value — Distinct from fair market value; courts apply totality-of-circumstances. Inadequate price alone is not constructive fraud without insolvency.
• Provisional remedies — If dissipation risk is imminent, prepare TRO/preliminary injunction for concurrent filing; allege irreparable harm and likelihood of success.
• Insider definition — UVTA § 1(8) defines insiders broadly: relatives, general partners, directors, officers, affiliates. [VERIFY state definition.]