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.