O.C.G.A. § 18-2-71 (2019)
Definitions
As used in this article, the term: (1) “Affiliate” means: (A) A person who directly or indirectly owns, controls, or holds with power to vote, 20 percent or more of the outstanding voting securities of the debtor, other than a person who holds the securities: (i) As a fiduciary or agent without sole discretionary power to vote the securities; or (ii) Solely to secure a debt, if the person has not exercised the power to vote; (B) A corporation 20 percent or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote by the debtor or a person who directly or indirectly owns, controls, or holds with power to vote 20 percent or more of the outstanding voting securities of the debtor, other than a person who holds the securities: (i) As a fiduciary or agent without sole power to vote the securities; or (ii) Solely to secure a debt, if the person has not in fact exercised the power to vote;
(C) A person whose business is operated by the debtor under a lease or other agreement, or a person substantially all of whose assets are controlled by the debtor; or (D) A person who operates the debtor’s business under a lease or other agreement or controls substantially all of the debtor’s assets. (2) “Asset” means property of a debtor, but the term does not include: (A) Property to the extent it is encumbered by a valid lien; (B) Property to the extent it is generally exempt under nonbankruptcy law; or (C) An interest in property held in tenancy by the entireties to the extent it is not subject to process by a creditor holding a claim against only one tenant. (3) “Claim,” except for claim for relief, means a right to payment, whether or not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured. (4) “Creditor” means a person who has a claim, regardless of when the person acquired the claim, together with any successors or assigns. (5) “Debt” means liability on a claim. (6) “Debtor” means a person who is liable on a claim. (7) “Electronic” means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities. (8) “Insider” includes: (A) If the debtor is an individual: (i) A relative of the debtor or of a general partner of the debtor; (ii) A partnership in which the debtor is a general partner; (iii) A general partner in a partnership described in division (ii) of this subparagraph; or (iv) A corporation of which the debtor is a director, officer, or person in control; (B) If the debtor is a corporation: (i) A director of the debtor; (ii) An officer of the debtor;
(iii) A person in control of the debtor; (iv) A partnership in which the debtor is a general partner; (v) A general partner in a partnership described in division (iv) of this subparagraph; or (vi) A relative of a general partner, director, officer, or person in control of the debtor; (C) If the debtor is a partnership: (i) A general partner in the debtor; (ii) A relative of a general partner in, or a general partner of, or a person in control of the debtor; (iii) Another partnership in which the debtor is a general partner; (iv) A general partner in a partnership described in division (iii) of this subparagraph; or (v) A person in control of the debtor; (D) An affiliate, or an insider of an affiliate as if the affiliate were the debtor; and (E) A managing agent of the debtor. (9) “Lien” means a charge against or an interest in property to secure payment of a debt or performance of an obligation and includes a security interest created by agreement, a judicial lien obtained by legal or equitable process or proceedings, a common-law lien, or a statutory lien. (10) “Organization” means a person other than an individual. (11) “Person” means an individual, public corporation, government or governmental subdivision agency or instrumentality, business or nonprofit entity, estate, or other legal entity. (12) “Property” means anything that may be the subject of ownership. (13) “Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form. (14) “Relative” means an individual related by consanguinity within the third degree as determined by the common law, a spouse, or an individual related to a spouse within the third degree as so determined and includes an individual in an adoptive relationship within the third degree.
(15) “Sign” means, with present intent to authenticate or adopt a record: (A) To execute or adopt a tangible symbol; or (B) To attach to or logically associate with the record an electronic symbol, sound, or process. (16) “Transfer” means every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an asset and includes payment of money, release, lease, and creation of a lien or other encumbrance. (17) “Valid lien” means a lien that is effective against the holder of a judicial lien subsequently obtained by legal or equitable process or proceedings.
History
Code 1981, § 18-2-71, enacted by Ga. L. 2002, p. 141, § 3; Ga. L. 2003, p. 140, § 18; Ga. L. 2015, p. 996, § 4A-1/SB 65.
Annotations
Law reviews. For article, “2014 Georgia Corporation
and Business Organization Case Law Developments,” see 20 Ga. St. Bar. J. 26 (April 2015).
JUDICIAL DECISIONS Transfer. - Definition of a “transfer” is broad enough to encompass a co-owner’s withdrawal of funds from a joint bank account. Bishop v. Patton, 288 Ga. 600, 706 S.E.2d 634, 2011 Ga. LEXIS 151, overruled in part, SRB Inv. Servs., LLLP v. Branch Banking & Trust Co., 289 Ga. 1, 709 S.E.2d 267, 2011 Ga. LEXIS 270 (2011). Debtor was entitled to summary judgment with respect to an adversary complaint count alleging fraudulent transfer of property under the Georgia Uniform Fraudulent Transfer Act (UFTA) (now Uniform Voidable Transactions Act), O.C.G.A. § 18-2-70 et seq., because the transfer of property fully protected the plaintiffs’ liens and, therefore, there was no “asset” and no claim for fraudulent conveyance existed. SEG Gateway, LLC v. Bay Circle Props., LLC (In re Bay Circle Props., LLC), No. 15-58440-WLH, No. 1605334-WLH, 2017 Bankr. LEXIS 2159 (Bankr. N.D. Ga. Aug. 1, 2017). When a minor, by and through the minor’s parent and guardian, appealed the trial court’s denial of the minor’s motion for summary judgment on the minor’s
claim for fraudulent transfer under the Uniform Voidable Transactions Act (UVTA), O.C.G.A. § 18-2-70 et seq., against the minor’s grandfather, the trial court erred in finding that the UVTA could never be used to set aside the terms of a previously entered divorce decree because the plain language of the UVTA supported the conclusion that the equitable division of assets within a divorce decree was a transfer within the UVTA. Enlow v. Enlow, 352 Ga. App. 865, 836 S.E.2d 128, 2019 Ga. App. LEXIS 653 (2019). Defendants’ claim that there was no antecedent debt at the time of the November 2014 transfers was unsupported by the record as the bank and/or its predecessors-in-interest held a right to payments under the terms of the February 2012 promissory note and the obligation to make such payments extended to the debtor no later than April 2014. Tuggle v. Ameris Bank, 363 Ga. App. 600, 872 S.E.2d 1, 2022 Ga. App. LEXIS 183 (2022). Property. - Defendants’ transferring of corporate goodwill, or “book of business,” to another entity was a transfer of property under the broad definition of
property in Georgia’s fraudulent transfer law. Jones v. Tauber & Balser, P.C., 503 B.R. 162, 2013 U.S. Dist. LEXIS 173255 (N.D. Ga.), modified, 503 B.R. 510, 2013 U.S. Dist. LEXIS 173214 (N.D. Ga. 2013). Broker-dealer was entitled to summary judgment on customers’ claims because another broker-dealer did not fraudulently transfer assets to the broker-dealer before going out of business as the customer accounts of registered representatives were not assets of the other brokerdealer in that the registered representatives were independent contractors who used the other broker-dealer’s platform. The other broker-dealer merely facilitated the transfer of the registered representatives and customer accounts to the broker-dealer. King v. Kovack Secs., No. 1:18-CV-04079-SCJ, 2021 U.S. Dist. LEXIS 212142 (N.D. Ga. Sept. 28, 2021). Summary judgment improper. - Trial court erred by granting summary judgment to a creditor because under O.C.G.A. § 18-2-75(b), the questioned real estate transfer involved the debtor purchasing the property for the debtor’s mother because the debtor had the right
to purchase the property and it was only deeded to the debtor briefly the same day, which transfer was not to satisfy an antecedent debt, thus, no fraudulent transfer occurred. Truelove v. Buckley, 318 Ga. App. 207, 733 S.E.2d 499, 2012 Ga. App. LEXIS 879 (2012), cert. denied, No. S13C0374, 2013 Ga. LEXIS 345 (Ga. Apr. 15, 2013). Transferees were not entitled to summary judgment on a Chapter 7 trustee’s claim to avoid transfers as actually fraudulent under the Bankruptcy Code and Georgia law as the transferees failed to demonstrate by either affirmative evidence or by pointing to lack of evidence that the trustee could not carry the trustee’s burden at trial regarding the debtor’s intent to transfer the debtor’s assets. Rather, several badges of fraud existed, including that the debtor made the transfer to an insider (a company wholly owned by a director of the debtor who owned more than 20 percent of the stock of the debtor) and that the transfer was made for the purpose of satisfying an antecedent debt owed to an insider. Howell v. Fulford (In re Southern Home & Ranch Supply, Inc.), 515 B.R. 699, 2014 Bankr. LEXIS 3493 (Bankr. N.D. Ga. 2014).
RESEARCH REFERENCES C.J.S. 37 C.J.S., Fraudulent Conveyances, § 5.