New Jersey Statutes 25:2-30. Defenses, liability and protection of transferee or obligee
Terms Used In New Jersey Statutes 25:2-30
- 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.
- 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.
- person: includes corporations, companies, associations, societies, firms, partnerships and joint stock companies as well as individuals, unless restricted by the context to an individual as distinguished from a corporate entity or specifically restricted to one or some of the above enumerated synonyms and, when used to designate the owner of property which may be the subject of an offense, includes this State, the United States, any other State of the United States as defined infra and any foreign country or government lawfully owning or possessing property within this State. See New Jersey Statutes 1:1-2
- 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
a. A transfer or obligation is not voidable under paragraph (1) of subsection a. of R.S.25:2-25 against a person who took in good faith and for a reasonably equivalent value given the debtor or against any subsequent transferee or obligee.
b. To the extent a transfer is voidable in an action by a creditor under paragraph (1) of subsection a. of R.S.25:2-29 the following rules apply:
(1) Except as otherwise provided in this section, the creditor may recover judgment for the value of the asset transferred, as adjusted under subsection c. 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) An immediate or mediate transferee of the first transferee, other than:
(i) a good-faith transferee who took for value; or
(ii) an immediate or mediate good-faith transferee of a person described in subsubparagraph (i) of subparagraph (b) of paragraph (1) of subsection b. of this section.
(2) Recovery pursuant to paragraph (1) of subsection a. of R.S.25:2-29 or subsection b. of R.S.25:2-29 of or from the asset transferred or its proceeds, by levy or otherwise, is available only against a person described in subparagraph (a) or (b) of paragraph (1) of subsection b. of this section.
c. If the judgment under subsection b. of this section is based upon the value of the asset transferred, the judgment shall 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 article, 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 paragraph (2) of subsection a. of R.S. 25:2-25 or R.S.25:2-27 if the transfer results from:
(1) Termination of a lease upon default by the debtor when the termination is pursuant to 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. A transfer is not voidable under subsection b. of R.S. 25:2-27:
(1) To the extent the insider gave new value to or for the benefit of the debtor after the transfer was made, except to the extent the new value was secured by a valid lien;
(2) If made in the ordinary course of business or financial affairs of the debtor and the insider; or
(3) 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.
g. The following rules shall determine the burden of proving matters referred to in this section:
(1) A party that seeks to invoke subsection a., d., e., or f. has the burden of proving the applicability of that subsection.
(2) Except as otherwise provided in paragraphs (3) and (4) of this subsection, 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 subsubparagraph (i) or (ii) of subparagraph (b) of paragraph (1) of subsection b.
(4) A party that seeks adjustment under subsection c. has the burden of proving the adjustment.
h. The standard of proof required to establish matters referred to in this section is preponderance of the evidence.
amended 2021, c.92, s.11.