Commercial Division Blog

Posted: April 5, 2021 / Categories Commercial, Fraudulent Conveyance

To be Liable For a Fraudulent Transfer, the Defendant Must Have Been a Transferee or Otherwise Benefited From the Transfer

On March 25, 2021, the First Department issued a decision in Ninth Space LLC v. Goldman, 2021 NY Slip Op. 01853, holding that to be liable for a fraudulent transfer, a defendant must have been a transferee or otherwise benefitted from the transfer, explaining:

The amended complaint is defective because it merely alleges that the Bluestone defendants participated in fraudulent transfers, without alleging that they were a transferee of the assets or benefited in any way from the transfers. However, a defective complaint will not be dismissed where affidavits and other evidence amplify inartfully pleaded but potentially meritorious claims. Plaintiffs rely on evidence submitted by the Goldman defendants in opposition to the Bluestone defendants' motion to dismiss which suggests that the Bluestone defendants may have participated in and benefitted from the alleged fraudulent transfers. This evidence indicates that plaintiffs have potentially meritorious fraudulent conveyance claims against the Bluestone defendants.

(Internal citations omitted).

We have substantial experience in helping judgment creditors collect on judgments and search for and attach assets worldwide. A big part of that effort is using the legal tools--such as claims for fraudulent conveyance discussed in this opinion--for recovering property that has been transferred to a third party to avoid its being seized to satisfy a judgment. Contact Schlam Stone & Dolan partner John Lundin at if you or a client need help collecting on a judgment.