Sec. 18. (a) A transfer or an obligation is not voidable under section 14(a)(1) of this chapter against a person that took in good faith and for a reasonably equivalent value given the debtor or against any subsequent transferee or obligee.

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Terms Used In Indiana Code 32-18-2-18

  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • Judgment: means all final orders, decrees, and determinations in an action and all orders upon which executions may issue. See Indiana Code 1-1-4-5
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • Lien: A claim against real or personal property in satisfaction of a debt.
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Uniform Commercial Code: A set of statutes enacted by the various states to provide consistency among the states' commercial laws. It includes negotiable instruments, sales, stock transfers, trust and warehouse receipts, and bills of lading. Source: OCC
     (b) To the extent that a transfer is avoidable in an action by a creditor under section 17(a)(1) of this chapter, the following rules apply:

(1) Except as otherwise provided in this chapter, the creditor may recover judgment for the value of the asset transferred, as adjusted under subsection (c), or the amount necessary to satisfy the creditor’s claim, whichever is less. The judgment may be entered against:

(A) the first transferee of the asset or the person for whose benefit the transfer was made; or

(B) an immediate or mediate transferee of the first transferee, other than:

(i) a good faith transferee that took for value; or

(ii) an immediate or mediate good faith transferee of a person described in item (i).

(2) Recovery under section 17(a)(1) or 17(a)(2) of this chapter or from the asset transferred or its proceeds, by levy or otherwise, is available only against a person described in subdivision (1).

     (c) If the judgment under subsection (b) is based upon the value of the asset transferred, the judgment must be for an amount equal to the value of the asset at the time of the transfer, subject to adjustment as the equities may require.

     (d) Notwithstanding voidability of a transfer or an obligation under this chapter, a good faith transferee or obligee is entitled, to the extent of the value given the debtor for the transfer or obligation, to:

(1) a lien on or a right to retain an interest in the asset transferred;

(2) enforcement of an obligation incurred; or

(3) a reduction in the amount of the liability on the judgment.

     (e) A transfer is not voidable under section 14(a)(2) or section 15 of this chapter if the transfer results from:

(1) termination of a lease upon default by the debtor when the termination is permitted by the lease and applicable law; or

(2) enforcement of a security interest in compliance with Article 9 of the Uniform Commercial Code, other than acceptance of collateral in full or partial satisfaction of the obligation it secures.

     (f) The following rules determine the burden of proving matters referred to in this section:

(1) A party that seeks to invoke subsection (a), (d), or (e) has the burden of proving the applicability of that subsection.

(2) Except as otherwise provided in subdivisions (3) and (4), the creditor has the burden of proving each applicable element of subsection (b) or (c).

(3) The transferee has the burden of proving the applicability to the transferee of subsection (b)(1)(B)(i) or (b)(1)(B)(ii).

(4) A party that seeks adjustment under subsection (c) has the burden of proving the adjustment.

     (g) The standard of proof required to establish matters referred to in this section is by a preponderance of the evidence.

[Pre-2002 Recodification Citation: 32-2-7-18.]

As added by P.L.2-2002, SEC.3. Amended by P.L.61-2017, SEC.16.

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