Ind. Code » Title 32

Ind. Code § 32-18-2-18

Person taking in good faith and for equivalent value; creditor's remedies; limits on recovery; judgments based on value of asset transferred; remedies of good faith transferees or obligees; transfer resulting from lease termination or enforcement of security interest; burdens of proof

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     Sec. 18. (a) A transfer or an obligation is not voidable under section 14(a)(1) of this chapter against a person that took in good faith and for a reasonably equivalent value given the debtor or against any subsequent transferee or obligee.

     (b) To the extent that a transfer is avoidable in an action by a creditor under section 17(a)(1) of this chapter, the following rules apply:

(1) Except as otherwise provided in this chapter, the creditor may recover judgment for the value of the asset transferred, as adjusted under subsection (c), or the amount necessary to satisfy the creditor's claim, whichever is less. The judgment may be entered against:

(A) the first transferee of the asset or the person for whose benefit the transfer was made; or

(B) an immediate or mediate transferee of the first transferee, other than:

(i) a good faith transferee that took for value; or

(ii) an immediate or mediate good faith transferee of a person described in item (i).

(2) Recovery under section 17(a)(1) or 17(a)(2) of this chapter or from the asset transferred or its proceeds, by levy or otherwise, is available only against a person described in subdivision (1).

     (c) If the judgment under subsection (b) is based upon the value of the asset transferred, the judgment must be for an amount equal to the value of the asset at the time of the transfer, subject to adjustment as the equities may require.

     (d) Notwithstanding voidability of a transfer or an obligation under this chapter, a good faith transferee or obligee is entitled, to the extent of the value given the debtor for the transfer or obligation, to:

(1) a lien on or a right to retain an interest in the asset transferred;

(2) enforcement of an obligation incurred; or

(3) a reduction in the amount of the liability on the judgment.

     (e) A transfer is not voidable under section 14(a)(2) or section 15 of this chapter if the transfer results from:

(1) termination of a lease upon default by the debtor when the termination is permitted by the lease and applicable law; or

(2) enforcement of a security interest in compliance with Article 9 of the Uniform Commercial Code, other than acceptance of collateral in full or partial satisfaction of the obligation it secures.

     (f) The following rules determine the burden of proving matters referred to in this section:

(1) A party that seeks to invoke subsection (a), (d), or (e) has the burden of proving the applicability of that subsection.

(2) Except as otherwise provided in subdivisions (3) and (4), the creditor has the burden of proving each applicable element of subsection (b) or (c).

(3) The transferee has the burden of proving the applicability to the transferee of subsection (b)(1)(B)(i) or (b)(1)(B)(ii).

(4) A party that seeks adjustment under subsection (c) has the burden of proving the adjustment.

     (g) The standard of proof required to establish matters referred to in this section is by a preponderance of the evidence.

[Pre-2002 Recodification Citation: 32-2-7-18.]

As added by P.L.2-2002, SEC.3. Amended by P.L.61-2017, SEC.16.

 

Notes of Decisions
Cited in 11 cases (3 in the last 5 years), 2004–2024 · leading case: Weintraut v. Comm'r
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Weintraut v. Comm'r (2016) tax · cites it 14× “In that action, the trustee acknowledged (1) that in form new Crown had purchased old Crown's assets and made transfers of certain funds to old Crown to pay for those assets and (2) that if the form of the transaction *320 were to be respected, (a) old Crown would be the initial…”
Hoesman v. Sheffler (2008) indctapp · cites it 4× “Under Indiana Code section 32-18-2-18: (a) A transfer or an obligation is not voidable under section 14(1) of this chapter against a person who took in good faith and for a reasonably equivalent *628 value or against any subsequent transferee or obligee.”
Rose v. Mercantile National Bank of Hammond (2006) indctapp · cites it 6× “Code § 82-18-2-17 4 and Ind.Code § 32-18-2-18. 5 Rose and Underwood moved for change of venue from the judge on December 17, 2002.”
Hair v. Schellenberger (2012) indctapp · cites it 2× “Indiana Code Section 32-18-2-18(a) states, “A transfer or an obligation is not voidable under Section 14(1) of this chapter against a person who took in good faith and for a reasonable equivalent value or against any subsequent transferee or obligee.”
Dfs Secured Healthcare Receivables Trust v. Caregivers Great Lakes, Inc. And Marc Leestma (2004) ca7 “Leestma’s personal liability Leestma argues that the district court erred in holding him personally liable, because under the IUFTA, a judgment may be entered only against a “first transferee” of fraudulently transferred assets or “a person for whose benefit the transfer was…”
State of Indiana ex rel. Curtis T. Hill, Jr., Attorney General of Indiana v. Larry Lawson, Angela M. Lawson aka Angie M. (2019) indctapp · cites it 10× “[9] The State contends that the trial court misinterpreted Indiana Code Section 32-18-2-18 (2018) of the Uniform Fraudulent Transfer Act ("the Act") when it ordered that Larry would receive $7,500 of the proceeds from the sale of the property "for his equitable interest in the…”
John J. Petr, Trustee v. BMO Harris Bank N.A. (2022) insb · cites it 2× “(the “Bankruptcy Code”),1 and Ind. Code § 32-18-2-18 (b)(1)(A). Sun Capital argues that Trustee’s claims are defeated by the “safe harbor” provision of § 546(e), asserting that Debtor made the Payment to a financial institution in connection with a 1 Unless otherwise noted, all…”
United States v. WITKEMPER (2021) insd · cites it 2× “Ind. Code § 32-18-2-18 (b)(1)(A). 78. Under the IUFTA, an "asset" is "property of the debtor" and "property" is "anything that may be the subject of ownership.”
John J. Petr v. BMO Harris Bank N.A. (2024) ca7 · cites it 2× “…… the creditor may 6 No. 23-1931 recover a judgment for the value of the asset transferred” from certain transferees. Ind. Code § 32-18-2-18 (b)(1). Alleging he can avoid the Transfer under § 544(b) via § 17(a), the Trustee contends that he may thereafter recover its value…”
Calvin Hair v. Mike Schellenberger and Lawyers Title Ins. Corp., Wells Fargo Bank, N.A., Felix Adejare, and Sharon Adeja (2012) indctapp · cites it 2× “Indiana Code Section 32-18-2-18(a) states, “A transfer or an obligation is not voidable under Section 14(1) of this chapter against a person who took in good faith and for a reasonable equivalent value or against any subsequent transferee or obligee.”
Georgia Receivables v. Caregivers Great Lak (2004) ca7 “See Ind. Code § 32-18-2-18 (b)(1). According to Leestma, CGL— the corporation he created to purchase CPI’s assets—was the “first transferee” of those assets, and Leestma acted as a mere agent of CGL.”
— Ind. Code § 32-18-2-18(a) — 2 cases
Hair v. Schellenberger (2012) indctapp “Indiana Code Section 32-18-2-18(a) states, “A transfer or an obligation is not voidable under Section 14(1) of this chapter against a person who took in good faith and for a reasonable equivalent value or against any subsequent transferee or obligee.”
Calvin Hair v. Mike Schellenberger and Lawyers Title Ins. Corp., Wells Fargo Bank, N.A., Felix Adejare, and Sharon Adeja (2012) indctapp “Indiana Code Section 32-18-2-18(a) states, “A transfer or an obligation is not voidable under Section 14(1) of this chapter against a person who took in good faith and for a reasonable equivalent value or against any subsequent transferee or obligee.”
— Ind. Code § 32-18-2-18(b)(1) — 1 case
Dfs Secured Healthcare Receivables Trust v. Caregivers Great Lakes, Inc. And Marc Leestma (2004) ca7 “Leestma’s personal liability Leestma argues that the district court erred in holding him personally liable, because under the IUFTA, a judgment may be entered only against a “first transferee” of fraudulently transferred assets or “a person for whose benefit the transfer was…”
— Ind. Code § 32-18-2-18(b)(2) — 1 case
Hoesman v. Sheffler (2008) indctapp “Under Indiana Code section 32-18-2-18: (a) A transfer or an obligation is not voidable under section 14(1) of this chapter against a person who took in good faith and for a reasonably equivalent *628 value or against any subsequent transferee or obligee.”
— Ind. Code § 32-18-2-18(c) — 1 case
State of Indiana ex rel. Curtis T. Hill, Jr., Attorney General of Indiana v. Larry Lawson, Angela M. Lawson aka Angie M. (2019) indctapp “[9] The State contends that the trial court misinterpreted Indiana Code Section 32-18-2-18 (2018) of the Uniform Fraudulent Transfer Act ("the Act") when it ordered that Larry would receive $7,500 of the proceeds from the sale of the property "for his equitable interest in the…”
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