Colorado § 38-8-106 - Transfers or obligation voidable as to present creditors.

§ 38-8-106. Transfers or obligation voidable as to present creditors.

(1) A transfer made or obligation incurred by a debtor is 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 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) Except 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 relief by a preponderance of the evidence.

Source: L. 91: Entire article added, p. 1686, § 1, effective July 1. L. 2025: Entire section amended, (SB 25-133), ch. 57, p. 239, § 5, effective August 6.

Editor's note - Colorado legislative change: This section was numbered as section 5 in the uniform act.

ANNOTATION

The failure to pay the taxes due results in a forfeiture of the original owner's interest in the property, by operation of law, to the state, which then grants title to the property to the holder of the lien free and clear of any other claims. Because the state transferred the tax deeds free of all prior interests, there was no transfer by a debtor, as is required to violate the Colorado Uniform Fraudulent Transfer Act. In re Grandote Country Club Co., Ltd., 252 F.3d 1146 (10th Cir. 2001).

A collusive foreclosure under power of sale is a fraudulent conveyance. The fundamental element of a fraudulent conveyance is whether the debtor's estate is unjustly diminished. Megabank Fin. v. Alpha Gamma Rho, 841 P.2d 318 (Colo. App. 1992).

A chattel mortgage is collusive if it is a transaction intended to delay creditors and to prevent the property of the debtor coming to their use. Megabank Fin. v. Alpha Gamma Rho, 841 P.2d 318 (Colo. App. 1992).

A fraudulent conveyance results whether of real or personal property if, as a result of the debtor's operations on the title to his property, the creditor loses by reason of finding less to seize and apply to his claim; however, no injury can result from a sale of an asset at its fair value since the estate does not abate as a result of what was done. Megabank Fin. v. Alpha Gamma Rho, 841 P.2d 318 (Colo. App. 1992).

Trial court did not err in setting aside preferential transfers from a corporation to the corporation's sole officer, shareholder, and director, because the corporation was insolvent at the time of the transfers and transfer was made to a corporate insider. Morris v. Askeland Enter., Inc., 17 P.3d 830 (Colo. App. 2000).

Where property was acquired through a regularly conducted tax sale subject to a competitive bidding procedure, the tax sale constitutes transfer for "reasonably equivalent value" under the Colorado Uniform Fraudulent Transfer Act. In re Grandote Country Club Co., Ltd., 252 F.3d 1146 (10th Cir. 2001).

Debtors did not receive reasonably equivalent value in exchange for their tithes and contributions to their church, therefore, the transfers were avoided. In re Bloch, 207 B.R. 944 (D. Colo. 1997).

To succeed on a fraudulent transfer claim, a creditor must show that the debtor did not receive a reasonably equivalent value in exchange for the property. Schempp v. Lucre Mgmt. Group, LLC, 18 P.3d 762 (Colo. App. 2000).

"Reasonable equivalence" is not wholly synonymous with market value, even though market value is an important factor to be used in the assessment, and the determination of reasonably equivalent value requires analysis of all the facts and circumstances surrounding the transaction. Silverberg v. Colantuno, 991 P.2d 280 (Colo. App. 1998); Schempp v. Lucre Mgmt. Group, LLC, 18 P.3d 762 (Colo. App. 2000).

The standard of "reasonably equivalent value" implies a rule of reasonableness in light of the particular circumstances. Schempp v. Lucre Mgmt. Group, LLC, 18 P.3d 762 (Colo. App. 2000).

In considering whether judgment debtor's distribution of proceeds from real estate sale was constructively fraudulent, trial court applied proper test with regard to insolvency under subsection (1). In dispute over real estate commission between real estate broker and judgment debtor, trial court correctly concluded that debtor's reserve asset was sufficient and reasonable to keep it solvent despite the distribution. CB Richard Ellis, Inc. v. CLGP, LLC, 251 P.3d 523 (Colo. App. 2010).