Texas Business & Commerce Code - Section 24.009. Defenses, Liability, And Protection Of Transferee
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§ 24.009. DEFENSES, LIABILITY, AND PROTECTION OF
TRANSFEREE. (a) A transfer or obligation is not voidable under
Section 24.005(a)(1) of this code against a person who took in good
faith and for a reasonably equivalent value or against any
subsequent transferee or obligee.
(b) Except as otherwise provided in this section, to the
extent a transfer is voidable in an action by a creditor under
Section 24.008(a)(1) of this code, 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:
(1) the first transferee of the asset or the person for
whose benefit the transfer was made; or
(2) any subsequent transferee other than a good faith
transferee who took for value or from any subsequent transferee.
(c)(1) Except as provided by Subdivision (2) of this
subsection, if the judgment under Subsection (b) of this section 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.
(2) The value of the asset transferred is not to be
adjusted to include the value of improvements made by a good faith
transferee, including:
(A) physical additions or changes to the asset
transferred;
(B) repairs to the asset;
(C) payment of any tax on the asset;
(D) payment of any debt secured by a lien on the
asset that is superior or equal to the rights of a voiding creditor
under this chapter; and
(E) preservation of the asset.
(d)(1) Notwithstanding voidability of a transfer or an
obligation under this chapter, a good faith transferee or obligee
is entitled, at the transferee's or obligee's election, to the
extent of the value given the debtor for the transfer or obligation,
to:
(A) a lien, prior to the rights of a voiding
creditor under this chapter, 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.
(2) Notwithstanding voidability of a transfer under
this chapter, to the extent of the value of any improvements made by
a good faith transferee, the good faith transferee is entitled to a
lien on the asset transferred prior to the rights of a voiding
creditor under this chapter
(e) A transfer is not voidable under Section 24.005(a)(2) or
Section 24.006 of this code 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 Chapter 9 of this code.
(f) A transfer is not voidable under Section 24.006(b) of
this code:
(1) 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;
(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.
Amended by Acts 1987, 70th Leg., ch. 1004, § 1, eff. Sept. 1,
1987; Acts 1993, 73rd Leg., ch. 570, § 11, eff. Sept. 1, 1993.
Section: 24.002 24.003 24.004 24.005 24.006 24.007 24.008 24.009 24.010 24.011 24.012 24.013 26.01 26.02 27.01
Last modified: August 10, 2007
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