1. A transfer of property for little or no consideration, made for the purpose of hindering or delaying a creditor by putting the property beyond the creditor’s reach; a transaction by which the owner of real or personal property seeks to place the property beyond the reach of creditors.
— Also termed fraud on creditors. [Cases: Fraudulent Conveyances 1.]
“With respect to the general power which is exercisable by deed, it seems that the principle that the donee’s creditors can reach the property subject to the exercised general power will have application only to the so-called fraudulent conveyance. That is to say, if the owned assets of the donee after the donative inter vivos exercise are sufficient to satisfy the creditors, then the exercise of the power will not subject the appointive property to the claims of the creditors; if, on the other hand, the owned assets of the donee are inadequate to satisfy creditors’ claims after the exercise of the power, then the transfer resulting from the exercise is likely to fall into the category of the fraudulent conveyance and the creditors will be able to reach the appointive property in the hands of the appointee.” Thomas F. Bergin & Paul G. Haskell, Preface to Estates in Land and Future Interests 173 (2d ed. 1984).
2. Bankruptcy. A prebankruptcy transfer or obligation made or incurred by a debtor for little or no consideration or with the actual intent to hinder, delay, or defraud a creditor. • A bankruptcy trustee may recover such a conveyance from the transferee if the requirements of 11 USCA § 548 are met.
— Also termed fraudulent transfer. Cf. PREFERENTIAL TRANSFER. [Cases: Bankruptcy 2641–2651. C.J.S. Bankruptcy §§ 152–157, 159.]
