Legislature(1993 - 1994)

03/01/1994 03:00 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  HB 439 - UNIFORM FRAUDULENT TRANSFER ACT                                     
                                                                               
  Number 170                                                                   
                                                                               
  CHAIRMAN HUDSON brought up HB 439 and invited Mr. Kurtz to                   
  testify.                                                                     
                                                                               
  Number 175                                                                   
                                                                               
  JERRY KURTZ, Attorney and Commissioner on the National                       
  Conference of Commissioner on Uniform State Laws, testified                  
  in support of HB 439.  He stated that HB 439 is aimed at                     
  bringing Alaska in line with other states in the field of                    
  fraudulent transfer.  Fraudulent transfer is not a criminal                  
  fraud, although some have gotten close.  Mr. Kurtz explained                 
  that creditors advance money to an individual after looking                  
  at the person's apparent financial strength.  A typical                      
  situation is where a debtor owes money and realizes he is in                 
  serious trouble so he transfers assets to others so that                     
  creditors will be deprived of their value.                                   
                                                                               
  MR. KURTZ stated that current Alaska law in this area was                    
  adopted from the state of Oregon and has received little                     
  legislative attention.  Mr. Kurtz gave an overview of the                    
  history of the Uniform Fraudulent Transfer Act (UFTA) in the                 
  United States.                                                               
                                                                               
  MR. KURTZ stated the importance of HB 439 is to bring Alaska                 
  business practices between creditors and debtors under the                   
  same rules and into conformity of the federal bankruptcy                     
  act.                                                                         
                                                                               
  Number 277                                                                   
                                                                               
  MARY ELLEN BEARDSLEY, Assistant Attorney General, Department                 
  of Law, testified in support of HB 439.  She stated HB 439                   
  is extremely beneficial to the state as it will assist the                   
  state in collecting debts.                                                   
                                                                               
  MS. BEARDSLEY noted that under current law the plaintiff has                 
  the burden of proving the existence of fraudulent intent and                 
  this can be extremely hard to prove.  She said UFTA would                    
  eliminate the present Alaskan necessity of finding actual                    
  intent by a property transferor to hinder, delay or defraud                  
  a creditor in many situations where the transferor is                        
  obviously transferring assets solely to keep them out of the                 
  reach of the transferor's creditors.                                         
                                                                               
  MS. BEARDSLEY stated that UFTA also sets out specific                        
  factors that can be considered by the court when determining                 
  if there is intent on the part of the debtor.                                
                                                                               
  MS. BEARDSLEY added that current law allows an insolvent                     
  debtor to convey all or some of his property to one                          
  creditor, but in HB 439 this would be considered fraud.                      
                                                                               
  MS. BEARDSLEY explained that HB 439 also provides remedies                   
  to creditors against the debtor, the property that has been                  
  transferred, and against the transferee and the transferee's                 
  property in some circumstances.                                              
                                                                               
  MS. BEARDSLEY added that HB 439 also addresses a statute of                  
  limitations.                                                                 
                                                                               
  Number 361                                                                   
                                                                               
  REP. PORTER stated that his staff has put in considerable                    
  amount of work on HB 439 and supports the bill in total.                     
                                                                               
  Number 381                                                                   
                                                                               
  REP. MULDER moved HB 439 with zero fiscal note and                           
  individual recommendations.  No objections were heard; it                    
  was so ordered.                                                              

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