A. A transfer or obligation is not voidable under section 44-1004, subsection A, paragraph 1 against a person who took in good faith and for a reasonably equivalent value or against any subsequent transferee or obligee.

Terms Used In Arizona Laws 44-1008

  • Action: includes any matter or proceeding in a court, civil or criminal. See Arizona Laws 1-215
  • Asset: means property of a debtor, but asset does not include any of the following:

    (a) Property to the extent it is encumbered by a valid lien. See Arizona Laws 44-1001

  • Claim: 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. See Arizona Laws 44-1001
  • Creditor: means a person who has a claim. See Arizona Laws 44-1001
  • Debtor: means a person who is liable on a claim. See Arizona Laws 44-1001
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Person: means an individual, partnership, corporation, association, organization, government or governmental subdivision or agency, business trust, estate, trust or any other legal or commercial entity. See Arizona Laws 44-1001
  • 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. See Arizona Laws 44-1001

B. Except as otherwise provided in this section, to the extent a transfer is voidable in an action by a creditor under section 44-1007, subsection A, paragraph 1, the creditor may recover judgment for the value of the asset transferred, as adjusted under subsection C of this section, or the amount necessary to satisfy the creditor’s claim, whichever is less. The judgment may be entered against either:

1. The first transferee of the asset or the person for whose benefit the transfer was made.

2. Any subsequent transferee other than a good faith transferee who took for value or from any subsequent transferee.

C. If the judgment under subsection B of this section is based on 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 article, a good faith transferee or obligee is entitled, to the extent of the value given the debtor for the transfer or obligation, to any of the following:

1. A lien on or a right to retain any interest in the asset transferred.

2. Enforcement of any obligation incurred.

3. A reduction in the amount of the liability on the judgment.

E. A transfer is not voidable under section 44-1004, subsection A, paragraph 2 or section 44-1005 if the transfer results from:

1. Termination of a lease on default by the debtor if the termination is pursuant to the lease and applicable law.

2. Enforcement of a security interest in compliance with Title 47, Chapter 9.

  Previous section
Next section  
 Article 1 Contents