Vermont § 7065 - Fraudulent transfers prior to petition

§ 7065. Fraudulent transfers prior to petition

• (a) Every transfer made or suffered and every obligation incurred by an insurer within
  one year prior to the filing of a successful petition for rehabilitation or liquidation
  under this chapter is fraudulent as to then existing and future creditors if made
  or incurred without fair consideration, or with actual intent to hinder, delay, or
  defraud either existing or future creditors. A transfer made or an obligation incurred
  by an insurer ordered to be rehabilitated or liquidated under this chapter, which
  is fraudulent under this section, may be avoided by the receiver, except as to a person
  who in good faith is a purchaser, lienor, or obligee, for a present fair equivalent
  value, and except that a purchaser, lienor, or obligee, who in good faith has given
  a consideration less than fair for such transfer, lien, or obligation, may retain
  the property, lien, or obligation as security for repayment. The court may, on due
  notice, order any such transfer or obligation to be preserved for the benefit of the
  estate, and in that event, the receiver shall succeed to and may enforce the rights
  of the purchaser, lienor, or obligee. (b)(1) A transfer of property other than real property shall be deemed to be made or suffered
  when it becomes so far perfected that no subsequent lien obtainable by legal or equitable
  proceedings on a simple contract could become superior to the rights of the transferee
  under subsection 7067(c) of this title. (2) A transfer of real property shall be deemed to be made or suffered when it becomes
  so far perfected that no subsequent bona fide purchaser from the insurer could obtain
  rights superior to the rights of the transferee. (3) A transfer that creates an equitable lien shall not be deemed to be perfected if there
  are available means by which a legal lien could be created. (4) Any transfer not perfected prior to the filing of a petition for liquidation shall
  be deemed to be made immediately before the filing of the successful petition. (5) The provisions of this subsection apply whether or not there are or were creditors
  who might have obtained any liens or persons who might have become bona fide purchasers. (c) A transaction of the insurer with a reinsurer shall be deemed fraudulent and may be
  avoided by the receiver under subsection (a) of this section if: (1) the transaction consists of the termination, adjustment, or settlement of a reinsurance
  contract in which the reinsurer is released from any part of its duty to pay the originally
  specified share of losses that had occurred prior to the time of the transactions,
  unless the reinsurer gives a present fair equivalent value for the release; and (2) any part of the transaction took place within one year prior to the date of filing
  of the petition through which the receivership was commenced. (d) Every person receiving any property from the insurer or any benefit thereof that is
  a fraudulent transfer under subsection (a) of this section shall be personally liable
  therefore and shall be bound to account to the liquidator. (e) Notwithstanding subsection (a) of this section, section 7066 of this title, or any other provision of this chapter to the contrary, no receiver or any other
  person shall avoid any transfer of, or any obligation to transfer, money or any other
  property arising under or in connection with any pledge, security, credit, collateral,
  loan, advances, reimbursement, or guarantee agreement or arrangement, or any similar
  agreement, arrangement, or other credit enhancement to which a federal home loan bank,
  as defined in section 7033 of this title, is a party, that is made, incurred, or assumed prior to or after the filing of a
  successful petition for rehabilitation or liquidation under this chapter, or otherwise
  would be subject to avoidance under this section or section 7066 of this title; provided, however, that a transfer may be avoided under this section or section 7066 of this title if the transfer was made with actual intent to hinder, delay, or defraud the insurer,
  a receiver appointed for the insurer, or existing or future creditors. (Added 1991, No. 45, § 2, eff. May 29, 1991; amended 2023, No. 32, § 11, eff. July 1, 2023.)