Fraudulent Conveyance and Asset Recovery Attorney

When a debtor moves money or property out of reach to avoid paying a legitimate debt, creditors are not without recourse. New York law provides powerful tools to challenge improper transfers, unwind sham transactions, and recover assets that rightfully should be available to satisfy a judgment or claim. Our firm represents creditors, judgment holders, trustees, and businesses across New York in fraudulent conveyance litigation and complex asset recovery matters.

Fraudulent conveyance cases are among the most technically demanding areas of New York commercial litigation. They require a thorough understanding of the governing statutes, the ability to trace assets through layers of entities and transactions, and the litigation experience to obtain the remedies necessary to make a creditor whole. This page explains how fraudulent conveyance law works in New York, the legal standards that apply, and how our attorneys can help you recover what you are owed.

What Is a Fraudulent Conveyance?

A fraudulent conveyance, sometimes called a voidable transaction or fraudulent transfer, occurs when a debtor transfers property or incurs an obligation in a manner that improperly places assets beyond the reach of creditors. The transfer may be an outright gift, a sale at less than fair value, a transfer to a friendly third party, or a series of transactions designed to obscure ownership of valuable property.

The core concern of the law is fairness. A debtor cannot deplete the pool of assets available to creditors by giving away property, selling it cheaply to insiders, or shuffling it into entities and trusts when a debt or judgment looms. When a transfer crosses the line, New York law permits a creditor to challenge it and, where appropriate, to recover the asset or its value.

New York's Uniform Voidable Transactions Act

New York fundamentally revised its fraudulent conveyance law when it adopted the Uniform Voidable Transactions Act (UVTA), which replaced the older Uniform Fraudulent Conveyance Act. The current law is codified in Article 10 of the New York Debtor and Creditor Law. The statute applies to transfers made and obligations incurred under its provisions and governs how creditors may challenge transactions that harm their ability to collect.

The statute distinguishes between two principal categories of voidable transfers: those involving actual fraud and those involving constructive fraud. Understanding the difference is critical, because the proof required for each is very different.

Actual Fraud

A transfer is voidable as to a creditor if the debtor made the transfer or incurred the obligation with the actual intent to hinder, delay, or defraud any creditor. Because debtors rarely admit to such intent, New York law allows courts to infer intent from circumstantial evidence known as badges of fraud. The statute lists factors that courts may consider, including:

• Whether the transfer was made to an insider, such as a relative, business partner, or affiliated company
• Whether the debtor retained possession or control of the property after the transfer
• Whether the transfer or obligation was concealed
• Whether the debtor had been sued or threatened with suit before the transfer was made
• Whether the transfer involved substantially all of the debtor's assets
• Whether the debtor absconded or removed or concealed assets
• Whether the value received by the debtor was reasonably equivalent to the value of the asset transferred
• Whether the debtor was insolvent or became insolvent shortly after the transfer
• Whether the transfer occurred shortly before or after a substantial debt was incurred

No single badge of fraud is decisive. Courts weigh the totality of the circumstances. The presence of several badges, however, can create a strong inference of fraudulent intent and shift the practical burden onto the transferee to justify the transaction.

Constructive Fraud

Constructive fraud does not require proof of any wrongful intent. Instead, a transfer is voidable if the debtor did not receive reasonably equivalent value in exchange and one of several financial conditions existed. For example, a transfer may be constructively fraudulent if the debtor was insolvent at the time or became insolvent as a result of the transfer, if the debtor was engaged in a business or transaction for which its remaining assets were unreasonably small, or if the debtor intended to incur or believed it would incur debts beyond its ability to pay.

Constructive fraud claims are often easier to prove because they focus on objective financial facts rather than the debtor's state of mind. A creditor who can demonstrate that the debtor gave away assets for nothing or for a fraction of their value while insolvent may prevail without ever proving an intent to defraud.

Who Can Bring a Fraudulent Conveyance Claim?

A range of parties may have standing to pursue a fraudulent conveyance claim in New York, including:

• Judgment creditors who have obtained a money judgment and discovered that the debtor transferred assets to avoid collection
• Unsecured creditors whose claims arose before or after the challenged transfer
• Lenders and financial institutions seeking to recover on defaulted loans
• Business partners and shareholders harmed by improper transfers of company assets
• Bankruptcy trustees and receivers acting on behalf of the estate or creditor body
• Matrimonial litigants where a spouse hides or transfers marital property

The statute protects both present creditors, whose claims existed at the time of the transfer, and future creditors, whose claims arose after the transfer in certain circumstances. Our attorneys evaluate your status as a creditor and the timing of the transfer to determine which provisions of the Debtor and Creditor Law apply to your case.

Remedies Available to Creditors

New York law provides robust remedies designed to neutralize a fraudulent transfer and restore the creditor's ability to collect. Depending on the facts, available relief may include:

• Avoidance of the transfer. A court may set aside the transfer to the extent necessary to satisfy the creditor's claim, returning the property or its value to the reach of creditors.
• Attachment. A creditor may obtain an order of attachment against the transferred asset or other property of the transferee.
• Injunctive relief. Courts can enjoin further disposition of the asset to prevent the property from being transferred again or dissipated during litigation.
• Appointment of a receiver. Where appropriate, a court may appoint a receiver to take charge of the asset and preserve its value.
• Money judgment against the transferee. When the asset has been sold or is no longer available, a creditor may recover a judgment against the transferee for the value of the property received.
• Recovery of attorneys' fees. In actual fraud cases, the Debtor and Creditor Law permits the recovery of reasonable attorneys' fees from the debtor or transferee, an important deterrent against fraudulent conduct.

The availability of attorneys' fees in cases of actual intent to defraud is a significant feature of New York law. It can dramatically improve the economics of pursuing a fraudulent conveyance claim and increases the pressure on a transferee to resolve the matter.

Common Scenarios We Handle

Fraudulent transfers take many forms, and the schemes used to hide assets are often sophisticated. Our attorneys have addressed a wide variety of asset recovery situations in New York, including:

Transfers to Family Members and Insiders

One of the most common tactics is for a debtor to transfer real estate, brokerage accounts, or business interests to a spouse, child, sibling, or close associate. These transfers are frequently structured as gifts or as sham sales for nominal consideration. Because transfers to insiders are a recognized badge of fraud, they often present strong recovery opportunities.

Undervalued Sales of Real Estate

Debtors sometimes sell New York real property for far less than market value to remove equity from creditor reach. We work with appraisers and real estate professionals to demonstrate the disparity between the sale price and the property's true value, supporting a claim of constructive fraud.

Corporate Asset Stripping

When a business faces mounting liabilities, owners may strip valuable assets, intellectual property, customer lists, or accounts receivable from the indebted entity and move them to a newly formed company. We investigate successor liability, alter-ego, and corporate veil-piercing theories alongside fraudulent conveyance claims to reach assets transferred among affiliated entities.

Distributions, Dividends, and Loan Repayments to Insiders

Excessive dividends, salary increases, or repayment of loans to owners and insiders shortly before insolvency can constitute voidable transfers. These transactions require careful financial analysis to establish the debtor's solvency and the adequacy of consideration.

Trusts and Self-Settled Arrangements

Some debtors attempt to shield assets by placing them in trusts. We analyze the structure and timing of these arrangements to determine whether they constitute fraudulent transfers that a creditor may unwind.

The Asset Recovery Process

Successful asset recovery requires a disciplined, methodical approach. While every case is unique, our representation typically proceeds through several phases.

Investigation and Asset Tracing

The first step is to locate and identify the assets that have been transferred. We conduct comprehensive asset searches, review public records, analyze financial statements and bank records, and use the discovery tools available under New York procedure to trace the movement of property. In many cases, assets pass through multiple hands or are commingled with other funds, and tracing requires forensic accounting expertise.

Pre-Litigation Strategy

Once assets are identified, we assess the strength of the available claims and the most effective path to recovery. In some matters, a well-supported demand or the threat of litigation prompts a resolution. In others, immediate court intervention is necessary to prevent further dissipation of assets.

Provisional Remedies

Because fraudulent transfers often involve a risk that the debtor will continue to hide or move property, early provisional relief is frequently essential. We move promptly for attachment, preliminary injunctions, and other orders to freeze assets and preserve the status quo while the case proceeds.

Litigation and Trial

If a negotiated resolution is not achievable, we litigate fraudulent conveyance claims aggressively in New York courts. This includes conducting depositions, retaining expert witnesses on valuation and solvency, and presenting the badges of fraud and financial evidence necessary to obtain avoidance of the transfer and a judgment in our client's favor.

Enforcement and Collection

Obtaining a favorable ruling is only meaningful if it translates into actual recovery. We pursue enforcement through the full range of collection mechanisms, including levies, garnishments, and the sale of recovered property, to convert a judgment into payment.

Statute of Limitations Considerations

Time is a critical factor in fraudulent conveyance cases. New York law imposes deadlines within which a creditor must bring a claim, and these limitations periods vary depending on whether the claim is based on actual or constructive fraud. A claim under the Uniform Voidable Transactions Act generally must be brought within a defined period after the transfer was made or the obligation was incurred. In cases of actual fraud, a discovery rule may extend the time within which a creditor must sue after the fraudulent nature of the transfer is or reasonably could have been discovered.

Because the precise deadline depends on the type of claim and the facts surrounding the transfer, it is essential to consult an attorney promptly. Delay not only risks losing the right to sue but also gives the debtor more time to further conceal or dissipate assets. We move quickly to evaluate timing issues and protect your claims.

Why Choose Our Firm for Fraudulent Conveyance and Asset Recovery

Fraudulent conveyance litigation sits at the intersection of commercial litigation, creditor's rights, and forensic financial analysis. Our firm brings together the experience and resources required to pursue these complex matters effectively. When you retain us, you benefit from:

• Deep knowledge of New York creditor's rights law, including the Debtor and Creditor Law and related provisions governing attachment, injunctions, and judgment enforcement
• Sophisticated asset tracing capabilities, supported by relationships with forensic accountants, appraisers, and investigators
• A strategic, results-oriented approach that focuses on actual recovery rather than mere paper victories
• Experience litigating against evasive debtors and complex entity structures, including alter-ego and veil-piercing theories
• Responsive client service that keeps you informed at every stage of the matter

We understand that pursuing a fraudulent conveyance claim is often a last resort after other collection efforts have failed. Our goal is to maximize your recovery while managing the cost and complexity of litigation efficiently.

Defending Against Fraudulent Conveyance Claims

Not every challenged transfer is fraudulent. Legitimate transactions are sometimes mistakenly characterized as voidable, and transferees who received property in good faith and for value have defenses available under New York law. The statute protects a transferee who took the asset in good faith and gave reasonably equivalent value. We also represent individuals and businesses defending against fraudulent conveyance allegations, working to demonstrate the legitimacy of the transaction, the adequacy of consideration, and the good faith of the transferee.

Frequently Asked Questions

Can I recover assets if I do not yet have a judgment?

Yes. New York law allows certain creditors to challenge fraudulent transfers even before obtaining a judgment, and provisional remedies such as attachment may be available to preserve assets while your underlying claim is litigated. The specific options depend on the nature of your claim.

What if the asset has already been sold to someone else?

If the asset is no longer in the transferee's hands, you may still recover a money judgment against the transferee for the value of the property received, provided the transferee does not qualify as a protected good faith purchaser. We evaluate the chain of transfers to identify the appropriate party to pursue.

How long do these cases take?

The timeline varies widely depending on the complexity of the asset structure, the cooperation of the debtor, and whether the matter settles or proceeds to trial. Some cases resolve quickly after a freeze order is obtained, while others require extended litigation. We work to achieve recovery as efficiently as the circumstances permit.

Protect Your Right to Recovery

If you suspect that a debtor has transferred property to avoid paying a debt or satisfying a judgment, the most important step is to act promptly. Assets that are not secured quickly can disappear, and statutory deadlines can bar even strong claims. Our New York fraudulent conveyance and asset recovery attorneys are ready to evaluate your situation, develop a recovery strategy, and pursue every available remedy to put your assets back within reach.

Contact our firm today to schedule a consultation. We will review the facts of your matter, explain your options under New York law, and help you take decisive action to recover what you are owed.

You can contact us by phone at 212-233-1233 or by email at [email protected].