- 19 -
to establish a close relationship.4 We disagree. That section
was not in effect until January 1, 1988, which was after House of
Babes was liquidated. 1987 Fla. Laws ch. 87-79, sec. 6; see
Snellgrove v. Fogazzi, 616 So. 2d 527, 528 (Fla. Dist. Ct. App.
1993).
c. Inadequate Consideration
Under Florida law, a conveyance made without adequate
consideration by a debtor is a badge of fraud. Cleveland Trust
Co. v. Foster, supra at 114; Money v. Powell, 139 So. 2d 702, 704
(Fla. Dist. Ct. App. 1962). Petitioners contend that the
liquidation of House of Babes was not a transfer of House of
4Fla. Stat. Ann. sec. 726.106(1) and (2) (West 1988)
provides:
726.106. Transfers fraudulent as to present creditors
(1) A transfer made or obligation incurred by a
debtor is fraudulent as to a creditor whose claim arose
before the transfer was made or the obligation was
incurred if the debtor made the transfer or incurred
the obligation without receiving a reasonably
equivalent value in exchange for the transfer or
obligation and the debtor was insolvent at the time or
the debtor became insolvent as a result of the transfer
or obligation.
(2) A transfer made by a debtor is fraudulent as
to a creditor whose claim arose before the transfer was
made if the transfer was made to an insider for an
antecedent debt, the debtor was insolvent at the time,
and the insider had reasonable cause to believe that
the debtor was insolvent.
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