SENATE BILL 25-133
BY SENATOR(S) Snyder and Carson, Roberts;
also REPRESENTATIVE(S) Soper and Camacho, Lindstedt, Marshall,
Woodrow.
C
ONCERNING VOIDABLE TRANSACTIONS , AND, IN CONNECTION THEREWITH,
UPDATING THE "COLORADO UNIFORM FRAUDULENT TRANSFERS
ACT" AND RENAMING IT THE "COLORADO VOIDABLE TRANSACTIONS
ACT".
Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. In Colorado Revised Statutes, amend 38-8-101 as
follows:
38-8-101. Short title. This article shall be known and may be cited
THE SHORT TITLE OF THIS ARTICLE 8, WHICH WAS FORMERLY KNOWN as the
"Colorado Uniform Fraudulent Transfer Act",
IS THE "COLORADO
VOIDABLE TRANSACTIONS ACT".
SECTION 2. In Colorado Revised Statutes, 38-8-102, amend the
introductory portion, (1)(a) introductory portion, (1)(a)(II), (1)(b)
introductory portion, (1)(b)(I), (1)(d), (3), (8) introductory portion, and (10);
NOTE: This bill has been prepared for the signatures of the appropriate legislative
officers and the Governor. To determine whether the Governor has signed the bill
or taken other action on it, please consult the legislative status sheet, the legislative
history, or the Session Laws.
________
Capital letters or bold & italic numbers indicate new material added to existing law; dashes
through words or numbers indicate deletions from existing law and such material is not part of
the act. and add (7.5), (7.7), (11.5), and (12.5) as follows:
38-8-102. Definitions. As used in this article ARTICLE 8, unless the
context otherwise requires:
(1) "Affiliate" means:
(a) A person who
THAT directly or indirectly owns, controls, or
holds with power to vote twenty percent or more of the outstanding voting
securities of the debtor, other than a person who
THAT holds the securities:
(II) Solely to secure a debt, if the person has not
IN FACT exercised
the power to vote;
(b) A corporation, twenty percent or more of whose outstanding
voting securities are directly or indirectly owned, controlled, or held with
power to vote, by the debtor or a person who THAT directly or indirectly
owns, controls, or holds with power to vote, twenty percent or more of the
outstanding voting securities of the debtor, other than a person who
THAT
holds the securities:
(I) As a fiduciary or agent without sole
DISCRETIONARY power to
vote the securities; or
(d) A person who
THAT operates the debtor's business under a lease
or other agreement or controls substantially all of the debtor's assets.
(3) "Claim",
EXCEPT AS THE TERM IS USED IN "CLAIM FOR RELIEF",
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.
(7.5) "E
LECTRONIC" MEANS TECHNOLOGY HAVING ELECTRICAL ,
DIGITAL, MAGNETIC, WIRELESS, OPTICAL, ELECTROMAGNETIC, OR SIMILAR
CAPABILITIES
.
(7.7) "E
NTITY" HAS THE SAME MEANING AS SET FORTH IN SECTION
7-90-102 (20).
(8) "Insider" means
INCLUDES:
PAGE 2-SENATE BILL 25-133 (10) "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
HAS THE MEANING SET FORTH IN SECTION 7-90-102 (49).
(11.5) "R
ECORD" MEANS INFORMATION THAT IS INSCRIBED ON A
TANGIBLE MEDIUM OR THAT IS STORED IN AN ELECTRONIC OR OTHER MEDIUM
AND IS RETRIEVABLE IN PERCEIVABLE FORM
.
(12.5) "S
IGN" OR "SIGNATURE" HAS THE MEANING SET FORTH IN
SECTION
7-90-102 (60.5).
SECTION 3. In Colorado Revised Statutes, 38-8-103, amend (2)
and (3) as follows:
38-8-103. Insolvency. (2) A debtor who
THAT is generally not
paying his THEIR debts as they become due is presumed to be insolvent. THE
PRESUMPTION IMPOSES ON THE DEBTOR THE BURDEN OF PROVING THAT THE
NONEXISTENCE OF INSOLVENCY IS MORE PROBABLE THAN THE EXISTENCE OF
INSOLVENCY
.
(3) A partnership is insolvent under subsection (1) of this section if
the sum of the partnership's debts is greater than the aggregate of all of the
partnership's assets, at a fair valuation, and the sum of the excess of the
value of each general partner's nonpartnership assets over the partner's
nonpartnership debts A DEBTOR THAT IS INSOLVENT AS DEFINED IN 11 U.S.C.
SEC. 101 (32) OF THE FEDERAL BANKRUPTCY CODE IS INSOLVENT .
SECTION 4. In Colorado Revised Statutes, 38-8-105, amend (1)
introductory portion, (1)(b)(II), (2) introductory portion, and (2)(k); and add
(3) and (4) as follows:
38-8-105. Transfer or obligation voidable as to present and
future creditors. (1) A transfer made or obligation incurred by a debtor is
fraudulent VOIDABLE as to a creditor, whether the creditor's claim arose
before or after the transfer was made or the obligation was incurred, if the
debtor made the transfer or incurred the obligation:
(b) Without receiving a reasonably equivalent value in exchange for
the transfer or obligation, and the debtor:
PAGE 3-SENATE BILL 25-133 (II) Intended to incur, or believed or reasonably should have
believed that he THE DEBTOR would incur, debts beyond his THE DEBTOR'S
ability to pay as they became due.
(2) In determining actual intent under paragraph (a) of subsection
(1) SUBSECTION (1)(a) of this section, consideration may be given, among
other factors, to whether:
(k) The debtor transferred the essential assets of the business to a
lienor who THAT transferred the assets to an insider of the debtor.
(3) A
CREDITOR MAKING A CLAIM FOR RELIEF UNDER SUBSECTION (1)
OF THIS SECTION HAS THE BURDEN OF PROVING THE ELEMENTS OF THE CLAIM
FOR RELIEF BY A PREPONDERANCE OF THE EVIDENCE
.
(4) I
T IS THE INTENT OF THE GENERAL ASSEMBLY THAT THE LAST
PARAGRAPH OF COMMENT EIGHT TO SECTION FOUR OF THE
"UNIFORM
VOIDABLE TRANSACTIONS ACT", AS AMENDED IN 2014 BY THE UNIFORM
LAW COMMISSION, DOES NOT APPLY IN COLORADO.
SECTION 5. In Colorado Revised Statutes, amend 38-8-106 as
follows:
38-8-106. Transfers or obligation voidable as to present
creditors. (1) A transfer made or obligation incurred by a debtor is
fraudulent
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.
(2) A transfer made by a debtor is fraudulent
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.
(3) E
XCEPT AS PROVIDED BY SECTION 38-8-103 (2), A CREDITOR
MAKING A CLAIM FOR RELIEF PURSUANT TO SUBSECTION
(1) OR (2) OF THIS
SECTION HAS THE BURDEN OF PROVING THE ELEMENTS OF THE CLAIM FOR
PAGE 4-SENATE BILL 25-133 RELIEF BY A PREPONDERANCE OF THE EVIDENCE .
SECTION 6. In Colorado Revised Statutes, 38-8-107, amend (1)
introductory portion, (1)(a)(I), and (5)(b) as follows:
38-8-107. When transfer is made or obligation is incurred.
(1) For the purposes of this article ARTICLE 8:
(a) A transfer is made:
(I) With respect to an asset that is real property other than a fixture,
but including the interest of a seller or purchaser under a contract for the
sale of the asset, when the transfer is so far perfected that a good faith
purchaser of the asset from the debtor against whom
WHICH applicable law
permits the transfer to be perfected cannot acquire an interest in the asset
that is superior to the interest of the transferee; and
(5) An obligation is incurred:
(b) If evidenced by a writing
RECORD, when the writing executed
RECORD SIGNED by the obligor is delivered to or for the benefit of the
obligee.
SECTION 7. In Colorado Revised Statutes, 38-8-108, amend (1)
introductory portion and (1)(c) as follows:
38-8-108. Remedies of creditors. (1) In an action for relief against
a transfer or obligation under this article ARTICLE 8, a creditor, subject to the
limitations in section 38-8-109, may obtain:
(c) With respect to a transfer made or obligation incurred that is
fraudulent VOIDABLE under section 38-8-105 (1)(a), a judgment for one and
one-half the value of the asset transferred or for one and one-half the
amount necessary to satisfy the creditor's claim, whichever is less, together
with the creditor's actual costs; except that any
A judgment entered against
a person under this paragraph (c) SUBSECTION (1)(c) is in lieu of, not in
addition to, a judgment against the same person under section 38-8-109 (2).
No
A judgment may NOT be entered pursuant to this paragraph (c)
SUBSECTION (1)(c) against a person other than the debtor unless that person
also acts with wrongful intent as defined in section 38-8-105 (1)(a);
PAGE 5-SENATE BILL 25-133 otherwise, judgment for money damages against a person other than the
debtor may be entered only as provided in section 38-8-109. No A judgment
may
NOT be entered under this paragraph (c)
SUBSECTION (1)(c) unless a
court of competent jurisdiction enters or has entered a judgment or order
establishing the validity of the creditor's claim against the debtor.
SECTION 8. In Colorado Revised Statutes, 38-8-109, amend (1),
(2), (4) introductory portion, (4)(a), (4)(b), and (5)(b); and add (7) and (8)
as follows:
38-8-109. Defenses, liability, and protection of transferee or
obligee. (1) A transfer or obligation is not voidable under section 38-8-105
(1)(a) against a person who
THAT took in good faith and for a reasonably
equivalent value
GIVEN TO THE DEBTOR or against any
A subsequent
transferee or obligee.
(2) T
O THE EXTENT A TRANSFER IS VOIDABLE IN AN ACTION BY A
CREDITOR UNDER SECTION
38-8-108 (1)(a), THE FOLLOWING RULES APPLY:
(a) Except as otherwise provided in this section, to the extent a
transfer is voidable in an action by a creditor under section 38-8-108 (1)(a),
the creditor may recover judgment for the value of the asset transferred, as
adjusted under subsection (3) of this section, or the amount necessary to
satisfy the creditor's claim, whichever is less. The judgment may be entered
against:
(a)
(I) The first transferee of the asset or the person for whose
benefit the transfer was made; or
(b) (II) Any subsequent A DIRECT OR INDIRECT transferee OF THE
FIRST TRANSFEREE
, other than:
(A) A good faith transferee or obligee who
THAT took for value; or
from any subsequent transferee or obligee.
(B) A DIRECT OR INDIRECT GOOD FAITH TRANSFEREE OF A PERSON
DESCRIBED IN SUBSECTION
(2)(a)(II)(A) OF THIS SECTION;
(4) Notwithstanding voidability of a transfer or an obligation under
this article
ARTICLE 8, a good faith transferee or obligee is entitled, to the
PAGE 6-SENATE BILL 25-133 extent of the value given the debtor for the transfer or obligation, to:
(a) A lien on or a right to retain any AN interest in the asset
transferred;
(b) Enforcement of any AN obligation incurred; or
(5) A transfer is not voidable under section 38-8-105 (1)(b) or
38-8-106 if the transfer results from:
(b) Enforcement of a security interest in compliance with the
provisions of the "Uniform Commercial Code - Secured Transactions",
article 9 of title 4, C.R.S. OTHER THAN THE ACCEPTANCE OF COLLATERAL IN
FULL OR PARTIAL SATISFACTION OF THE OBLIGATION IT SECURES
.
(7) T
HE BURDEN OF PROVING MATTERS REFERRED TO IN THIS SECTION
IS DETERMINED ACCORDING TO THE FOLLOWING
:
(a) A
PARTY THAT SEEKS TO INVOKE SUBSECTION (1), (4), (5), OR (6)
OF THIS SECTION HAS THE BURDEN OF PROVING THE APPLICABILITY OF THAT
SECTION
;
(b) E
XCEPT AS PROVIDED IN SUBSECTIONS (7)(c) AND (7)(d) OF THIS
SECTION
, THE CREDITOR HAS THE BURDEN OF PROVING EACH APPLICABLE
ELEMENT OF SUBSECTION
(2) OR (3) OF THIS SECTION;
(c) T
HE TRANSFEREE HAS THE BURDEN OF PROVING THE
APPLICABILITY TO THE TRANSFEREE OF SUBSECTION
(2)(a)(II)(A) OR
(2)(a)(II)(B) OF THIS SECTION; AND
(d) A PARTY THAT SEEKS ADJUSTMENT UNDER SUBSECTION (3) OF
THIS SECTION HAS THE BURDEN OF PROVING THE ADJUSTMENT
.
(8) T
HE STANDARD OF PROOF REQUIRED TO ESTABLISH MATTERS
REFERRED TO IN THIS SECTION IS PREPONDERANCE OF THE EVIDENCE
.
SECTION 9. In Colorado Revised Statutes, amend 38-8-110 as
follows:
38-8-110. Extinguishment of a claim for relief. (1) A cause of
PAGE 7-SENATE BILL 25-133 action CLAIM FOR RELIEF with respect to a fraudulent VOIDABLE transfer or
obligation under this article ARTICLE 8 is extinguished unless action is
brought:
(a) Under section 38-8-105 (1)(a), within NOT LATER THAN four
years after the transfer was made or the obligation was incurred or, if later,
within
NOT LATER THAN one year after the transfer or obligation was or
could reasonably have been discovered by the claimant;
(b) Under section 38-8-105 (1)(b) or 38-8-106 (1), within NOT
LATER THAN
four years after the transfer was made or the obligation was
incurred; or
(c) Under section 38-8-106 (2), within one year
NOT LATER THAN
FOUR YEARS
after the transfer was made. or the obligation was incurred.
SECTION 10. In Colorado Revised Statutes, add 38-8-113 as
follows:
38-8-113. Relation to electronic signatures in the federal
"Electronic Signatures in Global and National Commerce Act". T
HIS
ARTICLE
8 MODIFIES, LIMITS, OR SUPERSEDES THE FEDERAL "ELECTRONIC
SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT", 15 U.S.C. SEC.
7001
ET SEQ., BUT DOES NOT MODIFY, LIMIT, OR SUPERCEDE 15 U.S.C. SEC.
7001 (c)
OR AUTHORIZE ELECTRONIC DELIVERY OF ANY OF THE NOTICES
DESCRIBED IN
15 U.S.C. SEC. 7003 (b).
SECTION 11. In Colorado Revised Statutes, 2-5-102, amend (7)
as follows:
2-5-102. Inclusions - nonstatutory. (7) There shall be included in
the publication of the "Colorado Uniform Fraudulent Transfer Act"
"COLORADO VOIDABLE TRANSACTIONS ACT", as nonstatutory matter,
following each section of the article, the full text of the official comments
to that section contained in the official volume containing the 1984 official
text of the "Uniform Fraudulent Transfer Act" issued by the national
conference of commissioners on uniform state laws, with any changes in the
official comments or Colorado comments to correspond to Colorado
changes in the uniform act GUIDANCE ON HOW TO ACCESS THE OFFICIAL
COMMENTS OF THE
"UNIFORM VOIDABLE TRANSACTIONS ACT". The
PAGE 8-SENATE BILL 25-133 comments GUIDANCE ON HOW TO ACCESS THE OFFICIAL COMMENTS shall be
prepared by the revisor of statutes and approved for publication by the
committee on legal services.
SECTION 12. Act subject to petition - effective date -
applicability. (1) This act takes effect at 12:01 a.m. on the day following
the expiration of the ninety-day period after final adjournment of the
general assembly; except that, if a referendum petition is filed pursuant to
section 1 (3) of article V of the state constitution against this act or an item,
section, or part of this act within such period, then the act, item, section, or
part will not take effect unless approved by the people at the general
election to be held in November 2026 and, in such case, will take effect on
the date of the official declaration of the vote thereon by the governor.
PAGE 9-SENATE BILL 25-133 (2) This act applies to claims filed on or after the applicable
effective date of this act.
____________________________ ____________________________
James Rashad Coleman, Sr. Julie McCluskie
PRESIDENT OF SPEAKER OF THE HOUSE
THE SENATE OF REPRESENTATIVES
____________________________ ____________________________
Esther van Mourik Vanessa Reilly
SECRETARY OF CHIEF CLERK OF THE HOUSE
THE SENATE OF REPRESENTATIVES
APPROVED________________________________________
(Date and Time)
_________________________________________
Jared S. Polis
GOVERNOR OF THE STATE OF COLORADO
PAGE 10-SENATE BILL 25-133