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whether there was a transfer of property; i.e., whether the
property received by petitioner was from JCC (JCC’s property as
opposed to being due petitioner from the Westinghouse
settlement). If the property was, in fact, JCC’s, then we must
decide whether there was adequate consideration for the transfer
to petitioner.
The laws of the State of Texas provide for transferee
liability under a modified form of the Uniform Fraudulent
Transfer Act (TUFTA). TUFTA provides that a transferor engages
in a transfer that is fraudulent as to a creditor if: (1) The
transferor makes a transfer to a transferee; (2) the creditor has
a claim against the transferor before the transfer is made; (3)
the transferor makes the transfer without receiving reasonably
equivalent value; and (4) the transferor is insolvent at the time
of the transfer or is rendered insolvent as a result of the
transfer. Tex. Bus. & Com. Code Ann. sec. 24.006(a) (Vernon
1987); Hanna v. Commissioner, T.C. Memo. 1999-292.
If all four elements of TUFTA section 24.006(a) are present,
a creditor of the transferor (i.e., respondent) may recover from
the transferee an amount equivalent to the lesser of the amount
of the assets transferred to the transferee (reduced by the
amount of assets or rights received by the transferor on the
transfer, if any) or the amount of the creditor’s claim. Tex.
Bus. & Com. Code Ann. sec. 24.009(b), (d). If transferee
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Last modified: May 25, 2011