O.C.G.A.
O.C.G.A.

O.C.G.A. § 18-2-72 (2019)

Determining insolvency

✓ O.C.G.A. — 2019 edition (Public.Resource.Org Release 73)
Code text and O.C.G.A. statutory annotations on this page reflect the 2019 Official Code of Georgia Annotated (Public.Resource.Org Release 73, 2019-08-21; public domain per Georgia v. Public.Resource.Org, 2020). The Syfert case-law annotations in Notes of Decisions, below, are current.
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(a) A debtor is insolvent if, at a fair valuation, the sum of the debtor’s debts is greater than the sum of the debtor’s assets.

(b) A debtor who is generally not paying his or her debts as they become due other than as a result of a bona fide dispute is presumed to be insolvent. The presumption imposes on the party against which the presumption is directed the burden of proving that the nonexistence of insolvency is more probable than its existence.

(c) Assets under this Code section do not include property that has been transferred, concealed, or removed with intent to hinder, delay, or defraud creditors or that has been transferred in a manner making the transfer voidable under this article.

(d) Debts under this Code section do not include an obligation to the extent it is secured by a valid lien on property of the debtor not included as an asset.

History

Code 1981, § 18-2-72, enacted by Ga. L.

2002, p. 141, § 3; Ga. L. 2015, p. 996, § 4A-1/SB 65.

Annotations

JUDICIAL DECISIONS Determining the date of insolvency for purposes of a breach of trust claim under Georgia’s common law did not require the application of an insolvency standard differing significantly from the fair valuation standard under O.C.G.A. § 18-2-72. Post-Confirmation Comm. for Small Loans, Inc. v. Martin, No. 1:13-CV-195, 2016 U.S. Dist. LEXIS 76294 (M.D. Ga. June 13, 2016). Insolvency resulting in constructive fraud pled. - Actual fraud was adequately pled by alleging badges of fraud sufficient to infer the fraudulent nature of transfers to insiders; moreover, insolvency resulting in constructive fraud also was adequately pled. Ralls Corp. v. Huerfano River Wind, LLC, 27 F. Supp. 3d 1303, 2014 U.S. Dist. LEXIS 87414 (N.D. Ga. 2014). Judgment against debtor. - Debtor’s transfer of real property to the debtor’s spouse, a default judgment in a law-

suit, which the trustee claimed rendered the debtor insolvent, in which the spouse did not participate and which was filed after the transfer did not prove the debtor’s insolvency at the time of the transfer for purposes of former O.C.G.A. § 18-222(3); the spouse’s status as the debtor’s spouse, standing alone, did not establish privity with the debtor, and the judgment against the debtor did not bind the spouse. Thurmond v. Turner (In re Turner), No. 00-72597-PWB, No. 02-6433, 2006 Bankr. LEXIS 2745 (Bankr. N.D. Ga. Sept. 19, 2006). Insolvency determination. - Trial court did not err in ruling that the debtor was insolvent following the transfers of properties as the debtor acknowledged a past-due debt and lack of liquid assets as of the date of the property transfers. Tuggle v. Ameris Bank, 363 Ga. App. 600, 872 S.E.2d 1, 2022 Ga. App. LEXIS 183 (2022).

RESEARCH REFERENCES Am. Jur. 2d. 37 Am. Jur. 2d, Fraudulent Conveyances and Transfers, § 18 et seq.

C.J.S. 37 C.J.S., Fraudulent Conveyances, § 63 et seq.

Notes of Decisions
Cited in 15 cases (6 in the last 5 years), 2009–2023 · leading case: Watts v. MTC Dev., LLC (In re Palisades at West Paces Imaging Ctr., LLC), 501 B.R. 896 (Bankr. N.D. Ga. 2013).
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Watts v. MTC Dev., LLC (In re Palisades at West Paces Imaging Ctr., LLC), 501 B.R. 896 (Bankr. N.D. Ga. 2013). · cites it 10× “A debtor is insolvent under O.C.G.A. § 18-2-72, “if the sum of the debtor’s debts is greater than all of the debtor’s assets, at a fair valuation” or if the debtor “is generally not paying his or her debts as they become due.”
Kipperman v. Onex Corp., 411 B.R. 805 (N.D. Ga. 2009). · cites it 4× “§ 548 ; O.C.G.A. § 18-2-72. The Bankruptcy Code and the Georgia Code define “insolvent” to mean a “financial condition such that the sum of an entity’s debts is greater than all of such entity’s assets, at a fair valuation.”
Target Corp. v. Amerson, 755 S.E.2d 333 (Ga. Ct. App. 2014). · cites it 4× “OCGA § 18-2-72 (a); see Mercantile Nat. Bank v.”
Ralls Corp. v. Huerfano River Wind, LLC, 27 F. Supp. 3d 1303 (N.D. Ga. 2014). · cites it 2× “” O.C.G.A. § 18-2-72(b). This is what Ralls alleges.”
Georgia Com. Stores, Inc. v. Daniel T. Forsman, 803 S.E.2d 805 (Ga. Ct. App. 2017). · cites it 2× “See OCGA § 18-2-72 (a), (b); Target Corp. v. Amerson, 326 Ga.”
Rapp v. Escante, Inc., 695 S.E.2d 744 (Ga. Ct. App. 2010). · cites it 2× “4 OCGA § 18-2-72 (b). 5 Conrad v. Conrad, 278 Ga.”
Mukamal v. Nat'l Christian Charitable Found., Inc. (In re Palm Beach Fin. Partners, L.P.), 598 B.R. 885 (Bankr. S.D. Florida 2019). “But the two measures of financial distress at the core of these claims-insolvency and unreasonably small assets-are distinct both in terms of the evidence required to prove them and, importantly for this case, the creditors that may pursue them.”
Sharon J. Law v. Se Prop. Holdings, LLC (Ga. Ct. App. 2022). · cites it 8× “) As to insolvency, former OCGA § 18-2-72 provided: (a) A debtor is insolvent if the sum of the debtor’s debts is greater than all of the debtor’s assets, at a fair valuation.”
Windward Campus Owner, LLC v. Good Night Med. of Ohio, LLC (Ga. Ct. App. 2022). · cites it 4× “The debts from Phillips and VGM 22 OCGA § 18-2-72 (a). 23 OCGA § 18-2-72 (b).”
Mukamal v. Nat'l Christian Charitable Found., Inc. (In re Palm Beach Fin. Partners, L.P.), 588 B.R. 633 (Bankr. S.D. Florida 2018). “" O.C.G.A. § 18-2-72. During the period of the transfers, essentially all of 2006, MGI's balance sheet showed significant net assets.”
Target Corp. v. Kennon Amerson D/B/A South Coast Builders (Ga. Ct. App. 2014). · cites it 4× “Thus, even if we were inclined to entertain Amerson’s argument that a failure to pay its judgment, in and of itself, could demonstrate that the Greens were “generally not paying” their debts,26 Amerson still 24 OCGA § 18-2-72 (a); see Mercantile Nat. Bank v.”
Jessie Tuggle v. Ameris Bank as Successor of Hamilton State Bank (Ga. Ct. App. 2022). · cites it 2× “For purposes of Georgia’s UFTA, “[a] debtor is insolvent if the sum of the debtor’s debts is greater than all of the debtor’s assets, at a fair valuation,” and “[a] debtor who is generally not paying his or her debts as they become due is presumed to be insolvent.”
Show all 15 citing cases →
— 18-2-72(a) — 2 cases
Watts v. MTC Dev., LLC (In re Palisades at West Paces Imaging Ctr., LLC), 501 B.R. 896 (Bankr. N.D. Ga. 2013). “A debtor is insolvent under O.C.G.A. § 18-2-72, “if the sum of the debtor’s debts is greater than all of the debtor’s assets, at a fair valuation” or if the debtor “is generally not paying his or her debts as they become due.”
Pucci, Sr v. Hill (Bankr. N.D. Ga. 2022).
— 18-2-72(b) — 2 cases
Ralls Corp. v. Huerfano River Wind, LLC, 27 F. Supp. 3d 1303 (N.D. Ga. 2014). “” O.C.G.A. § 18-2-72(b). This is what Ralls alleges.”
Good Gateway, LLC v. NRCT, LLC (Bankr. N.D. Ga. 2022).
— 18-2-72(e) — 1 case
Watts v. MTC Dev., LLC (In re Palisades at West Paces Imaging Ctr., LLC), 501 B.R. 896 (Bankr. N.D. Ga. 2013). “A debtor is insolvent under O.C.G.A. § 18-2-72, “if the sum of the debtor’s debts is greater than all of the debtor’s assets, at a fair valuation” or if the debtor “is generally not paying his or her debts as they become due.”
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