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delay or defraud” the State taxing authorities of Pennsylvania
and Ohio.
Defenses to a Finding of Fraudulent Transfer
Despite a finding that a conveyance is fraudulent under
PUFTA, relief is denied as against a transferee who can show that
the transfer was made in “good faith” and for “reasonably
equivalent value”. The exception provides in pertinent part:
Sec. 5108. Defenses, liability and protection of
transferee
(a) Certain transfers or obligations not
fraudulent.--A transfer or obligation is not fraudulent
under section 5104(a)(1) (relating to transfers
fraudulent as to present and future creditors) against
a person who took in good faith and for a reasonably
equivalent value or against any subsequent transferee
or obligee. [12 Pa. Cons. Stat. Ann. sec. 5108(a)
(West 1999).]
“The person who invokes this defense carries the burden of
establishing good faith and the reasonable equivalence of the
consideration exchanged.” 12 Pa. Cons. Stat. Ann. sec. 5108,
cmt. 1 (West 1999) (citing Chorost v. Grand Rapids Factory
Showrooms, Inc., 77 F. Supp. 276, 280 (D.N.J. 1948), affd. 172
F.2d 327, 329 (3d Cir. 1949)).
The committee comment to PUFTA section 5108 aids in defining
the term “good faith”:
(6) As used in this section, “good faith” means
that the transferee or obligee acted without actual
fraudulent intent and that the transferee or obligee
did not collude with the debtor or otherwise actively
participate in the fraudulent scheme of the debtor. A
transferee’s or obligee’s knowledge of a transferor’s
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