A. A transfer made or obligation incurred by a debtor is voidable as to a creditor
whose claim arose before the transfer was made or the obligation was incurred if the
debtor made the transfer or incurred the obligation without receiving a reasonably
equivalent value in exchange for the transfer or obligation and the debtor was insolvent
at that time or the debtor became insolvent as a result of the transfer or obligation.
B. A transfer made by a debtor is voidable as to a creditor whose claim arose before
the transfer was made if the transfer was made to an insider for an antecedent debt, the
debtor was insolvent at that time and the insider had reasonable cause to believe that
the debtor was insolvent.
C. Subject to Subsection B of Section 56-10-16 NMSA 1978, a creditor making a
claim for relief under Subsection A or B of this section has the burden of proving the
elements of the claim for relief by a preponderance of the evidence.
History: Laws 1989, ch. 382, § 6; 2015, ch. 54, § 14.
ANNOTATIONS
The 2015 amendment, effective January 1, 2016, changed "fraudulent" transfers to
"voidable" transfers, as used in the Voidable Transactions Act; in the catchline, changed
"Transfers fraudulent as to present creditors" to "Transfer or obligation voidable as to
present creditor"; in Subsection A, after "debtor is", deleted "fraudulent" and added
"voidable"; in Subsection B, after "debtor is", deleted "fraudulent" and added "voidable";
and added Subsection C.
Factors in determining voidable transfers. — The noninclusive enumeration of
factors contained in 56-10-18 NMSA 1978 and this section are to be considered when
determining whether the funds that ordinarily would be exempt from attachment under
42-10-2 and 42-10-3 NMSA 1978 should be set aside as the result of a voidable
transfer. Dona Ana Sav. & Loan Ass'n v. Dofflemeyer, 1993-NMSC-031, 115 N.M. 590,
855 P.2d 1054.
Trustee failed to meet burden of proving debtor's insolvency. — Where debtor, a
corporation wholly owned by defendants, filed a Chapter 11 bankruptcy petition, which
was later converted to a Chapter 7 bankruptcy petition, and where the Chapter 7 trustee
filed a fraudulent transfer claim, seeking to recover approximately $1,200,000 in
transfers that debtor made to third parties as shareholder distributions, the bankruptcy
court held that the trustee failed to satisfy its burden of showing that debtor was
insolvent at the time of the alleged constructive fraudulent transfers and thus could not
prevail on avoidance claims. In re Quick Cash, 620 B.R. 358 (Bankr. D. N.M. 2020).
Notes of Decisions
Wagner v. Cunningham (In re Vaughan Co., Realtors), 481 B.R. 752 (Bankr. D.N.M. 2012).
· cites it 10× “1978 § 56-10-19(A), based lack of reasonably equivalent value received by VCR in exchange for the transfers and VCR’s insolvency at the time, or as a result, of the transfers Count 7 Constructive Fraud under state law, N.”
Montoya v. Sasso (In re Sasso), 550 B.R. 550 (Bankr. D.N.M. 2016).
“A, 1978 § 56-10-19(A) (constructive fraud) (Count 12); and Fraudulent Transfer under N.”
J Patrick Murphy v. C Kincaid, No. 28,176 (N.M. Ct. App. Jan. 11, 2010).
· cites it 21× “Plaintiff contends he should have been awarded 10 damages under Subsections (A) and (B) of Section 56-10-19 of the UFTA because 11 PRI, through the actions of Kincaid, fraudulently transferred PRI assets to Kincaid and 12 to her new corporation, Med Express.”
Gonzales v. Delgado, No. 17-01051 (Bankr. D.N.M. Aug. 27, 2020).
· cites it 4× “Count V seeks to avoid the Transfers under NMSA § 56-10-19(A), which provides: A transfer made or obligation incurred by a debtor is voidable as to a creditor whose claim arose before the transfer was made or the obligation was incurred if the debtor made the transfer or…”
Gutierrez v. Uni Trans, LLC, No. 1:21-cv-00073 (D.N.M. Aug. 20, 2021).
· cites it 2× “See NMSA § 56-10-19(A) (“A transfer made or obligation incurred by a debtor is fraudulent as to a creditor whose claim arose before the transfer was made or the obligation was incurred if the debtor made the transfer or incurred the obligation without receiving a reasonably…”
Riasati v. Salim, No. 1:22-cv-00358 (D.N.M. Oct. 25, 2022).
“Counts 1 and 2 of the complaint are brought pursuant to the Uniform Voidable Transactions Act (“UVTA”), NMSA § 56-10-18 (voidable transaction) and § 56-10-19 (constructive voidable transaction).”
N.M. Stat. § 56-10-19(A): 8 cases
Wagner v. Cunningham (In re Vaughan Co., Realtors), 481 B.R. 752 (Bankr. D.N.M. 2012).
“1978 § 56-10-19(A), based lack of reasonably equivalent value received by VCR in exchange for the transfers and VCR’s insolvency at the time, or as a result, of the transfers Count 7 Constructive Fraud under state law, N.”
Montoya v. Sasso (In re Sasso), 550 B.R. 550 (Bankr. D.N.M. 2016).
“A, 1978 § 56-10-19(A) (constructive fraud) (Count 12); and Fraudulent Transfer under N.”
N.M. Stat. § 56-10-19(B): 5 cases
Wagner v. Cunningham (In re Vaughan Co., Realtors), 481 B.R. 752 (Bankr. D.N.M. 2012).
“1978 § 56-10-19(A), based lack of reasonably equivalent value received by VCR in exchange for the transfers and VCR’s insolvency at the time, or as a result, of the transfers Count 7 Constructive Fraud under state law, N.”
J Patrick Murphy v. C Kincaid, No. 28,176 (N.M. Ct. App. Jan. 11, 2010).
“Plaintiff contends he should have been awarded 10 damages under Subsections (A) and (B) of Section 56-10-19 of the UFTA because 11 PRI, through the actions of Kincaid, fraudulently transferred PRI assets to Kincaid and 12 to her new corporation, Med Express.”
Gonzales v. Delgado, No. 17-01051 (Bankr. D.N.M. Aug. 27, 2020).
“Count V seeks to avoid the Transfers under NMSA § 56-10-19(A), which provides: A transfer made or obligation incurred by a debtor is voidable as to a creditor whose claim arose before the transfer was made or the obligation was incurred if the debtor made the transfer or…”
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