31-2-340. Defenses, liability, and protection of transferee. (1) A transfer or obligation is not voidable under 31-2-333(1)(a) against a person who took in good faith and for a reasonably equivalent value or against any subsequent transferee or obligee.

Terms Used In Montana Code 31-2-340

  • Asset: means property of a debtor, but the term does not include:

    (a)property to the extent it is encumbered by a valid lien;

    (b)property to the extent it is generally exempt under nonbankruptcy law; or

    (c)an interest in property held in tenancy by the entireties to the extent it is not subject to process by a creditor holding a claim against only one tenant. See Montana Code 31-2-328

  • Claim: means a right to payment, whether or not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, legal, equitable, secured, or unsecured. See Montana Code 31-2-328
  • Creditor: means a person who has a claim. See Montana Code 31-2-328
  • Debt: means liability on a claim. See Montana Code 31-2-328
  • Debtor: means a person who is liable on a claim. See Montana Code 31-2-328
  • Insider: includes :

    (a)if the debtor is an individual:

    (i)a relative of the debtor or of a general partner of the debtor;

    (ii)a partnership in which the debtor is a general partner;

    (iii)a general partner in a partnership described in subsection (7)(a)(ii); or

    (iv)a corporation of which the debtor is a director, officer, or person in control;

    (b)if the debtor is a corporation:

    (i)a director of the debtor;

    (ii)an officer of the debtor;

    (iii)a person in control of the debtor;

    (iv)a partnership in which the debtor is a general partner;

    (v)a general partner in a partnership described in subsection (7)(b)(iv); or

    (vi)a relative of a general partner, director, officer, or person in control of the debtor;

    (c)if the debtor is a partnership:

    (i)a general partner in the debtor;

    (ii)a relative of a general partner in, a general partner of, or a person in control of the debtor;

    (iii)another partnership in which the debtor is a general partner;

    (iv)a general partner in a partnership described in subsection (7)(c)(iii); or

    (v)a person in control of the debtor;

    (d)an affiliate or an insider of an affiliate as if the affiliate were the debtor; and

    (e)a managing agent of the debtor. See Montana Code 31-2-328

  • 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
  • Lien: A claim against real or personal property in satisfaction of a debt.
  • Lien: means a charge against or an interest in property to secure payment of a debt or performance of an obligation and includes a security interest created by agreement, a judicial lien obtained by legal or equitable process or proceedings, a common-law lien, or a statutory lien. See Montana Code 31-2-328
  • 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 Montana Code 31-2-328
  • 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 Montana Code 31-2-328

(2)Except as otherwise provided in this section, to the extent a transfer is voidable in an action by a creditor under 31-2-339(1)(a), the creditor may recover judgment for the value of the asset transferred, as adjusted under subsection (3), 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)any subsequent transferee other than a good faith transferee who took for value or from any subsequent transferee.

(3)If the judgment under subsection (2) 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.

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

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

(b)enforcement of any obligation incurred; or

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

(5)A transfer is not voidable under 31-2-333(1)(b) or 31-2-334 if the transfer results from:

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

(b)enforcement of a security interest in compliance with Title 30, chapter 9A.

(6)A transfer is not voidable under 31-2-334(2):

(a)to the extent the insider gave new value to or for the benefit of the debtor after the transfer was made, unless the new value was secured by a valid lien;

(b)if made in the ordinary course of business or financial affairs of the debtor and the insider; or

(c)if made pursuant to a good faith effort to rehabilitate the debtor and the transfer secured present value given for that purpose as well as an antecedent debt of the debtor.

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