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Texas law, payment in satisfaction of an antecedent debt may be
adequate consideration in order to avoid transferee liability.
Respondent argues that the record does not contain
documentary evidence of a debt.6 However, the preponderance of
the evidence shows that, at the time of the transfer, there was a
debt due petitioner from JCC.
Petitioner testified that he regularly advanced and received
funds from his corporations. Petitioner’s uncontroverted
testimony, was supported by the testimony of other witnesses.
Mr. Boswell testified that petitioner regularly advanced money to
the corporation(s) to meet payroll and vendor obligations. The
testimony of Mr. Boswell was also uncontroverted.
In addition, documents in the record support and corroborate
petitioner’s testimony and that of Mr. Boswell. JCC reported
shareholder loans due to petitioner in returns of prior years,
including the years ending June 30, 1988, and 1989. Most
significantly, petitioner reported $25,924 of imputed interest
income from the corporation(s) on his 1991 individual income tax
return. On that point, Mr. Boswell testified that “there were no
5(...continued)
sold the asset in an arm’s-length transaction. The Texas UFTA
includes in its definition of “value” an antecedent debt that the
transfer satisfies.
6 Respondent contends that his burden was satisfied because
of petitioner’s failure to offer documentary evidence of debt.
That contention alone would not make a prima facie showing with
respect to transferee liability. Ultimately, this issue has
evolved into a factual and legal dispute about whether there was
adequate consideration for the transfer.
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Last modified: May 25, 2011