Nevada Revised Statutes 112.220 – Avoidance of transfer or obligation: Protection of good faith transferee or obligee; recovery of judgment for value of asset transferred; certain transfers not voidable
1. A transfer or obligation is not voidable under paragraph (a) of subsection 1 of NRS 112.180 against a person who took in good faith and for a reasonably equivalent value or against any subsequent transferee or obligee.
Terms Used In Nevada Revised Statutes 112.220
- Asset: means property of a debtor, but the term does not include:
(a) Property to the extent it is encumbered by a valid lien;
(b) Property to the extent it is generally exempt under nonbankruptcy law; or
(c) An interest in property held in tenancy by the entireties or as community property to the extent it is not subject to process by a creditor holding a claim against only one tenant. See Nevada Revised Statutes 112.150
- Claim: means a right to payment, whether or not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured. See Nevada Revised Statutes 112.150
- Creditor: means a person who has a claim. See Nevada Revised Statutes 112.150
- Debt: means liability on a claim. See Nevada Revised Statutes 112.150
- Debtor: means a person who is liable on a claim. See Nevada Revised Statutes 112.150
- Insider: includes :
(a) If the debtor is a natural person:
(1) A relative of the debtor or of a general partner of the debtor;
(2) A partnership in which the debtor is a general partner;
(3) A general partner in a partnership described in subparagraph (2); and
(4) A corporation of which the debtor is a director, officer or person in control;
(b) If the debtor is a corporation:
(1) A director of the debtor;
(2) An officer of the debtor;
(3) A person in control of the debtor;
(4) A partnership in which the debtor is a general partner;
(5) A general partner in a partnership described in subparagraph (4); and
(6) A relative of a general partner, director, officer or person in control of the debtor;
(c) If the debtor is a partnership:
(1) A general partner in the debtor;
(2) A relative of a general partner in, a general partner of, or a person in control of the debtor;
(3) Another partnership in which the debtor is a general partner;
(4) A general partner in a partnership described in subparagraph (3); and
(5) A person in control of the debtor;
(d) An affiliate, or an insider of an affiliate as if the affiliate were the debtor; and
(e) A managing agent of the debtor. See Nevada Revised Statutes 112.150
- 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.
- Lien: means a charge against or an interest in property to secure payment of a debt or performance of an obligation, and includes a security interest created by agreement, a judicial lien obtained by legal or equitable process or proceedings, a common-law lien and a statutory lien. See Nevada Revised Statutes 112.150
- 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.
- Person: includes a government and a governmental subdivision or agency. See Nevada Revised Statutes 112.150
- Transfer: means every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an asset, and includes payment of money, release, lease and creation of a lien or other encumbrance. See Nevada Revised Statutes 112.150
2. Except as otherwise provided in this section, to the extent a transfer is voidable in an action by a creditor under paragraph (a) of subsection 1 of NRS 112.210, the creditor may recover judgment for the value of the asset transferred, as adjusted under subsection 3 of this section, 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) Any subsequent transferee other than a transferee who took in good faith for value or from any subsequent transferee.
3. If the judgment under subsection 2 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.
4. Notwithstanding voidability of a transfer or an obligation under this chapter, a transferee or obligee who took in good faith is entitled, to the extent of the value given the debtor for the transfer or obligation, to:
(a) A lien on or a right to retain any interest in the asset transferred;
(b) Enforcement of any obligation incurred; or
(c) A reduction in the amount of the liability on the judgment.
5. A transfer is not voidable under paragraph (b) of subsection 1 of NRS 112.180 or NRS 112.190 if the transfer results from:
(a) Termination of a lease upon default by the debtor when the termination is pursuant to the lease and applicable law; or
(b) Enforcement of a security interest in compliance with NRS 104.9101 to 104.9709, inclusive.
6. A transfer is not voidable under subsection 2 of NRS 112.190:
(a) To the extent the insider gave new value to or for the benefit of the debtor after the transfer was made unless the new value was secured by a valid lien;
(b) If made in the ordinary course of business or financial affairs of the debtor and the insider; or
(c) If made pursuant to a good faith effort to rehabilitate the debtor and the transfer secured present value given for that purpose as well as an antecedent debt of the debtor.