Fraudulent Transfer Case Law in Florida

This page analyzes the most important Florida court decisions on fraudulent transfers.

Badges of Fraud and Summary Judgment

A Florida court can set a transfer aside with no direct evidence that the debtor meant to hinder, delay, or defraud, because the eleven statutory badges of fraud are circumstantial proof; two or three can be enough. One badge is only a suspicious circumstance; several together make a prima facie case that shifts the burden to the defending party (Mejia v. Ruiz, Fla. 3d DCA 2008; Wiand v. Lee, 11th Cir. 2014; Mane, Fla. 4th DCA 2023). The national bankruptcy decisions on fraudulent transfers, the trustee’s borrowed claim included, are on the bankruptcy case law page.

Mane FL Corp. v. Beckman, 355 So. 3d 418 (Fla. 4th DCA 2023). Leading case. Summary judgment voiding a transfer in proceedings supplementary was affirmed on at least seven badges of fraud: an insider transferee (the debtor’s father’s corporation), a concealed transfer, an earlier suit, substantially all the debtor’s assets, insolvency, removed or concealed assets, and absconding. Because Florida’s summary-judgment rule follows the federal standard, the Fourth District’s rule that fraudulent-transfer cases are decided without trial “only in extraordinary circumstances” no longer applies. A transferee that paid nothing has no § 726.109(1) good-faith-and-value defense.

Wiand ex rel. Valhalla Investment Partners, L.P. v. Lee, 753 F.3d 1194 (11th Cir. 2014). Proving that a transfer furthered a Ponzi scheme establishes actual intent to defraud under § 726.105(1)(a); the badges of fraud need not be considered. The receivership entities were “creditors” of the schemer because their claim was a right to payment. The funds he controlled were “property of a debtor” because they could have been applied to the debt he owed them. Summary judgment for the receiver was affirmed.

Wells Fargo Bank, N.A. v. Barber, 85 F. Supp. 3d 1308 (M.D. Fla. 2015). Ruling on a motion to dismiss, the court held that creditors holding a $62.5 million deficiency judgment stated actual and constructive fraudulent-transfer claims resting on six pleaded badges of fraud. The transfer moved substantially all the debtor’s remaining assets into a single-member Nevis LLC; the membership interest was intangible personal property with a Florida situs, so Florida law governed the creditors’ remedies against it.

Proving Actual Intent

Mejia v. Ruiz, 985 So. 2d 1109 (Fla. 3d DCA 2008). Two shareholder-directors sold the debtor corporation’s only asset the day its answer was filed, paid themselves the proceeds, and dissolved the corporation without the notice § 607.1406 requires. Whether a transfer was made to delay, hinder, or defraud is judged by the badges in § 726.105(1)(a); a combination creates a prima facie case, and the defendants offered nothing to rebut it. The court stated the burden shift under § 56.29(6)(a), the pre-2016 numbering.

Veigle v. United States, 873 F. Supp. 623 (M.D. Fla. 1994). A debtor quit-claimed three parcels to his parents, and the transfer was fraudulent as to the United States under § 726.105(1)(a). His own deposition testimony proved intent, reinforced by the insider relationship and his continued control: he collected the rents and occupied a parcel rent-free. Because the decision rested on actual intent, the court made no finding on insolvency or the transferees’ knowledge of it.

Wiand v. Morgan, 919 F. Supp. 2d 1342 (M.D. Fla. 2013). A receiver may recover an investor’s “false profits,” everything received above the principal invested, because amounts above principal are not reasonably equivalent value and so defeat the § 726.109(1) defense. The one-year discovery period ran from the receiver’s appointment because the scheme concealed the transfers. Summary judgment was entered for $380,369, and prejudgment interest was denied as inequitable.

In re McCarn’s Allstate Finance, Inc., 326 B.R. 843 (Bankr. M.D. Fla. 2005). A guilty plea to an information describing a Ponzi scheme establishes actual intent under § 726.105(1)(a) even where the charging document never uses the phrase. Brokers who took commissions on the scheme’s notes were initial transferees liable for every commission received, and neither innocence nor an unfair result is a defense. The same rule reached a broker’s commissions and returns in In re Old Naples Securities, Inc., 343 B.R. 310 (Bankr. M.D. Fla. 2006).

In re Sigma-Tech Sales, Inc., 570 B.R. 408 (Bankr. S.D. Fla. 2017). A principal moved the debtor’s business into three successor entities that were its alter egos and drew the proceeds into his joint account with his wife. Nine badges were present, and because the debtor and the successors were legally one, the “debtor retained control” badge was satisfied. The one-year savings clause let the trustee reach transfers older than four years. Judgment was $1,602,956.99 against the principal and his wife, plus $6,905,597.86 against the principal as alter ego.

General Trading, Inc. v. Yale Materials Handling Corp., 119 F.3d 1485 (11th Cir. 1997). A finding that a successor’s purchase of the debtor’s inventory and fixed assets was not fraudulent was vacated on three errors. The fair-value analysis ignored the goodwill that passed, the close relationship between the companies was never weighed, and the court asked whether “all” rather than “substantially all” of the assets moved. A transferee that is an insider in substance, though outside the statutory definition, counts like a badge of fraud.

In re Ramsurat, 361 B.R. 246 (Bankr. M.D. Fla. 2006). A debtor quitclaimed his half interest in the house to his wife the day a $180,140.66 judgment was entered against him. He was insolvent and received nothing, so the transfer was both actual and constructive fraud, and the trustee recovered $37,500, the value of the interest.

The three elements of actual fraud. To prove actual fraud, the plaintiff must show a creditor to be defrauded, a debtor intending fraud, and a conveyance of property that could have been applied to the debt. The Fourth District stated the elements in Nationsbank v. Coastal Utilities, 814 So. 2d 1227, 1229 (Fla. 4th DCA 2002). The Eleventh Circuit restated them in Isaiah v. JPMorgan Chase Bank, 960 F.3d 1296, 1302 (11th Cir. 2020), and the Second District quoted Isaiah in Recovery Agents v. Tutko, 399 So. 3d 1281 (Fla. 2d DCA 2025).

Badges Rebutted and Pleading Defects

Recovery Agents, LLC v. Tutko, 399 So. 3d 1281 (Fla. 2d DCA 2025). A court cannot find actual intent on argument of counsel and the allegations in a motion. The creditor bears the burden of proving the transfer fraudulent by a preponderance, and the trial court identified no badges. The transferee was entitled to an evidentiary hearing on its § 726.109(1) defense; deciding the question on forty-eight hours’ notice at a fifteen-minute hearing denied due process.

Stermer v. Old Republic National Title Insurance Co., No. 23-10850 (11th Cir. Nov. 24, 2025). Three badges, the transfer of substantially all assets, a threatened suit, and insolvency, did not carry the trustee’s burden. The transfers served a legitimate purpose, reinsuring the debtor’s title-policy liabilities, that Florida’s insurance regulator had reviewed and approved. Reasonably equivalent value does not require a dollar-for-dollar exchange, and the successor-liability and alter-ego claims failed too.

In re Stewart, 280 B.R. 268 (Bankr. M.D. Fla. 2001). Several badges were present but rebutted. A premature newborn’s medical prospects and the debtor’s own uninsurability were legitimate reasons, the funds came from a retirement plan that may have been exempt, and transfers into entireties form were not a complete divestiture, so the creditor failed her burden. A default produced no default judgment because the complaint recited the statute and its badges without pleading an identifiable asset, date, or transfer. The one-year savings clause reaches only actual-intent claims and runs from discovery of the transfer.

In re D.I.T., Inc., 561 B.R. 793 (Bankr. S.D. Fla. 2016). The fraudulent intent must attach to the transfers the creditor attacks. A debtor that lied to two lenders while running a real wholesale business did not taint its ordinary loan payments, the Ponzi presumption does not reach a debtor whose business was real, and ten of the eleven badges were absent. A payoff of a commercial loan is not a “settlement payment” protected by 11 U.S.C. § 546(e).

Calarese v. Weissfisch, 87 So. 3d 1225 (Fla. 3d DCA 2012). A judgment creditor moving for summary judgment in proceedings supplementary must conclusively refute every affirmative defense the impleaded spouse raises. The creditor refuted none of four, including that the business parcel was entireties property, that the homestead article barred execution on the residence, and that § 726.110 had extinguished the claim, so the order voiding both quitclaim deeds was reversed.

Wurtzebach v. Flooring Depot FTL, Inc., 384 So. 3d 251 (Fla. 4th DCA 2024). A claim under § 726.106(1) is a separate cause of action that requires no intent. An earlier judgment that rejected a fraud count and refused to pierce the corporate veil therefore barred a later § 726.106(1) claim neither by res judicata nor by collateral estoppel; the earlier ruling never decided whether the transfers occurred.

Pleading a fraudulent-transfer claim. A complaint survives dismissal if it alleges ultimate facts that would amount to fraud; tracking §§ 726.105 and 726.106 and naming the debtor, the creditor, and the transferee is enough. A complaint that does not identify the transfers it attacks, or that omits the transferees as parties, fails. The first rule is Ferguson Enterprises v. Astro Air Conditioning & Heating, 137 So. 3d 613, 615–16 (Fla. 2d DCA 2014). The second is Feldkamp v. Long Bay Partners, 773 F. Supp. 2d 1273, 1286–87 (M.D. Fla. 2011).

Ferguson Enterprises v. Astro Air Conditioning & Heating, 137 So. 3d 613 (Fla. 2d DCA 2014). A fraudulent-transfer count that tracks the language of sections 726.105 and 726.106 states a cause of action. Ferguson alleged it was a creditor before the guarantors moved property into a partnership, and that they received no reasonably equivalent value. The circuit court went outside the four corners of the complaint when it dismissed both counts. The Second District reversed the dismissal with prejudice of both counts and remanded with instructions to reinstate them.

Cadle Co. II v. Lowery (In re Lowery), 250 F. App’x 911 (11th Cir. 2007). In a nonprecedential decision, the Eleventh Circuit held that a creditor who never cited § 726.105 still raised an intentional fraudulent conveyance claim. Invoking §§ 222.29 and 222.30, which strip exemptions traceable to Chapter 726 transfers, together with allegations of the debtors’ fraudulent intent, was enough. The lower courts had addressed only constructive fraud under § 726.106, and the district court held the intentional-fraud argument waived; the panel reversed and remanded so the claim could be decided.

Time Limits and the Statute of Repose

A Florida fraudulent-transfer claim is extinguished four years after the transfer, but a creditor who already holds a judgment may have far longer, and Florida’s district courts of appeal disagree about how much longer.

National Auto Service Centers, Inc. v. F/R 550, LLC, 192 So. 3d 498, 509–12 (Fla. 2d DCA 2016). Leading case. The one-year savings clause in § 726.110(1) starts when the creditor discovers the transfer, not when it discovers the fraud, and § 726.110(1) is a statute of repose that equitable estoppel cannot extend as a matter of law.

Estate of Arlene Townsend v. Berman (In re Fundamental Long Term Care, Inc.), 81 F.4th 1264 (11th Cir. 2023). Section 726.110 is a statute of repose, not a statute of limitations. Its text extinguishes the cause of action rather than barring the remedy, so equitable tolling cannot extend the period.

Claim	Deadline	Authority
Actual intent to hinder, delay, or defraud (§ 726.105(1)(a))	4 years after the transfer, or 1 year after the creditor discovers the transfer if that is later	§ 726.110(1); National Auto Service Centers (Fla. 2d DCA 2016)
Constructive fraud (§ 726.105(1)(b)) and the present-creditor insolvency claim (§ 726.106(1))	4 years after the transfer	§ 726.110(2)
Insider preference (§ 726.106(2))	1 year after the transfer	§ 726.110(3)
Fraudulent conversion of non-exempt assets into exempt form (§ 222.30)	4 years after the conversion	§ 222.30(5)
Claim in proceedings supplementary (§ 56.29(3))	Chapter 726’s periods (Fourth District); life of the judgment (Third District); pending in the Florida Supreme Court	McGregor (Fla. 4th DCA 2021); Rosenberg (Fla. 3d DCA 2023); Saadi, No. SC2025-1675 (Fla.)
Bankruptcy trustee using the IRS’s claim (11 U.S.C. § 544(b))	The IRS’s ten-year collection period	26 U.S.C. § 6502; In re Kipnis (Bankr. S.D. Fla. 2016)
Bankruptcy avoidance (11 U.S.C. § 548(a)(1))	2 years before the petition	11 U.S.C. § 548(a)(1)
Transfer to a self-settled trust with actual intent (11 U.S.C. § 548(e)(1))	10 years before the petition	11 U.S.C. § 548(e)(1)

Stoecklin v. United States, 858 F. Supp. 167 (M.D. Fla. 1994). Federal, not Florida, limitations law governs the United States’ suit to set aside a fraudulent conveyance under Chapter 726. The court declined to follow a Hawaii decision that distinguished a state statutory right that extinguishes the cause of action from a common-law collection right, because Eleventh Circuit law makes no such distinction.

The One-Year Discovery Clause

Paragon Health Services, Inc. v. Central Palm Beach Community Mental Health Center, Inc., 859 So. 2d 1233 (Fla. 4th DCA 2003). Leading case. Section 726.110(3) gives a creditor one year to attack an insider preference and contains no discovery savings clause, so the claim is extinguished one year after the transfer no matter when the creditor learned of it. A transferee moving for summary judgment must also negate insolvency under both § 726.103 tests.

Desak v. Vanlandingham, 98 So. 3d 710 (Fla. 1st DCA 2012). Recording a deed does not, without more, start the one-year savings clause as a matter of law. Recording gives constructive notice to later purchasers and lienors, but a defrauded creditor need not monitor the land records of all 67 counties, so when the creditor could reasonably have discovered the transfer is a question of fact, and dismissal was error.

Ada Turkish Trask 2005 Trust Number One v. Turkish, No. 3D21-1457 (Fla. 3d DCA May 4, 2022). A complaint alleging that the debtor moved $250,000 to his wife was wrongly dismissed as time-barred, because it never alleged when the transfer occurred and the bar was not apparent from its four corners. The one-year period does not displace the four-year period; § 726.110(1) applies it only “if later.” Section 726.110’s periods apply in proceedings supplementary through § 56.29(9).

Wiand v. Cloud, 919 F. Supp. 2d 1319 (M.D. Fla. 2013). While the Ponzi operator controlled the funds, the scheme and the transfers were concealed and could not reasonably have been discovered, so the one-year savings period ran from the receiver’s appointment, and a complaint filed within a year of it was timely. An innocent investor gives no reasonably equivalent value for amounts above principal, so the § 726.109(1) defense does not protect “false profits.”

Wiand v. Meeker, 572 F. App’x 689 (11th Cir. 2014). The unpublished per curiam opinion followed Desak. The bare fact that assets went into a trust could not reasonably have alerted the receiver, so the savings period ran from his appointment. A trust’s gains cannot be set off against the trustee’s personal losses, because a person’s role as trustee is legally distinct from his individual identity.

In re Goldschmidt, 510 B.R. 387 (S.D. Fla. 2014). Section 726.105 reaches transfers fraudulent as to future creditors, so a creditor whose claim arose after the transfer is not barred, while § 726.106 protects present creditors only. The IRS could not reasonably have discovered a 2007 transfer until it surfaced in the 2012 bankruptcy, so a claim settled seven months later was timely, and the court did not reach the ten-year federal collection period.

How Long Does a Judgment Creditor Have to Attack a Transfer in Proceedings Supplementary?

Florida’s district courts of appeal are divided: the Fourth District applies Chapter 726’s four-year period in proceedings supplementary, the Third District holds the § 56.29(3) remedy runs for the life of the judgment, and the Florida Supreme Court has the question.

Chapter 726’s Clock Governs

Uoweit, LLC v. Fleming, 300 So. 3d 1203 (Fla. 4th DCA 2020). Section 726.110 governs fraudulent-transfer claims brought in proceedings supplementary under § 56.29, so a supplemental complaint filed more than seven years after the deed and over a year after the triggering sale was time-barred; dismissal was affirmed.

McGregor v. Fowler White Burnett, P.A., 332 So. 3d 481, 490–91 (Fla. 4th DCA 2021). A fraudulent-transfer claim seeking a money judgment in proceedings supplementary must be brought under § 56.29(9) and is therefore subject to Chapter 726’s limitations periods, including the repose period of § 726.110. Section 56.29(3)(b) limits relief to voiding the transfer and directing the sheriff to take identifiable personal property, and § 56.29(6) authorizes no money judgment on a (3)(b) claim; summary judgments for the transferee law firms were affirmed.

In re Hill, 332 B.R. 835 (Bankr. M.D. Fla. 2005). Section 56.29 creates no substantive right of recovery and no basis for a money judgment; it is a procedural mechanism for investigating the debtor’s assets. Proceedings supplementary may be commenced during a judgment’s twenty-year life, but § 56.29 creates no twenty-year period for a fraudulent-transfer claim, which § 726.110 governs. The court also read the one-year discovery clause as open to equitable doctrines, a reading later Florida authority did not follow.

§ 56.29 Has Its Own Clock

Rosenberg v. U.S. Bank, N.A., 360 So. 3d 795, 800–02 (Fla. 3d DCA 2023). In proceedings supplementary, the trial court voided a debtor’s assignment of a judgment to a trust and entered a money judgment against the trust; the Third District affirmed. The § 56.29(3) remedy is separate and distinct from Chapter 726 and runs for the life of the judgment. Sections 56.29(3) and (6) authorize a money judgment against a person served with a notice to appear. Addressing McGregor, the court wrote “We respectfully disagree.”

Each decision binds the trial courts in its own district (Pardo v. State, 596 So. 2d 665, 666 (Fla. 1992)). Whether a transfer more than four years old is safe from a judgment creditor therefore depends on where the creditor files. The Fourth District’s rule usually protects it, and the Third District’s rule exposes it for the judgment’s twenty-year life.

Saadi v. Maroun, 157 F.4th 1353, 1364 (11th Cir. 2025). The court certified five questions on §§ 56.29 and 726.110 to the Florida Supreme Court, including whether a judgment creditor may seek a money judgment under § 56.29(3)(b) throughout the judgment’s life or is confined to § 56.29(9) and § 726.110’s periods. It called § 726.110 a statute of repose, as the Second District had held, and asked whether Florida’s tolling statute, § 95.051, reaches fraudulent-transfer claims. The Florida Supreme Court accepted them on October 28, 2025 (No. SC2025-1675); the case is pending.

Martinez v. JP Morgan Chase Bank, N.A., Nos. 4D2025-1072, 4D2025-1073, and 4D2025-1075 (Fla. 4th DCA July 1, 2026). A motion to commence proceedings supplementary is a pleading or its functional equivalent, because § 56.29 is a special statutory proceeding commenced by motion and affidavit. A later supplemental complaint asserting Chapter 726 claims therefore relates back to that motion under Rule 1.190(c), and three dismissals as time-barred were reversed. Even in the Fourth District, the four-year period is measured from the motion that opened the proceedings, not from the later complaint.

Creditor Remedies Under Chapter 726

Florida’s fraudulent-transfer statute lets a creditor void the transfer and take a money judgment against the first transferee, but its catch-all clause helps carry out those remedies rather than creating new ones.

Section 726.108(1) lets a creditor avoid the transfer or attach the asset and, subject to equitable principles and the rules of procedure, obtain an injunction, a receiver, or “any other relief the circumstances may require,” all limited by § 726.109. Under § 726.109, a good-faith transferee who paid reasonably equivalent value has a defense, and one who paid less keeps a lien for the value given. Otherwise the creditor may take a money judgment against the first transferee or the person for whose benefit the transfer was made.

SE Property Holdings, LLC v. Welch, 65 F.4th 1335 (11th Cir. 2023). The Eleventh Circuit, relying on Freeman, predicted that the Florida Supreme Court would read the catch-all to give a creditor no money judgment against the transferor and no punitive damages or attorney’s fees. The same decision appears under the caption SE Property Holdings, LLC v. Neverve LLC.

Hansard Construction Corp. v. Rite Aid of Florida, Inc., 783 So. 2d 307, 309 (Fla. 4th DCA 2001), and McCalla v. E.C. Kenyon Construction Co., 183 So. 3d 1192, 1194 (Fla. 1st DCA 2016). Both read the catch-all to permit money damages against a transferor. No district court of appeal has disagreed, so under Pardo they bind every Florida trial court, while federal courts follow the contrary SE Property Holdings prediction, a split by forum that only the Florida Supreme Court can resolve.

What the Creditor Can Recover

Yusem v. South Florida Water Management District, 770 So. 2d 746 (Fla. 4th DCA 2000). Leading case. A fraudulent conveyance action is a creditor’s remedy directed at a transaction or a transferee, not an action against the debtor for failing to pay a prior judgment. A creditor already holding a judgment therefore cannot take a second judgment against the same debtor for the amount transferred. A spouse whose entireties account held the funds for a day, without her knowledge or benefit, is neither debtor nor transferee and is not liable.

Myers v. Brook, 708 So. 2d 607 (Fla. 2d DCA 1998). Section 726.109(2) caps a creditor’s judgment at the asset’s value or the amount needed to satisfy the claim, whichever is less. The “as the equities may require” adjustment in § 726.109(3) applies only where the judgment rests on the asset’s value. A court may not use the catch-all in § 726.108(1)(c)3 to set transfers aside beyond that cap. A single badge, common ownership, will not support actual fraud.

Stavrou v. Destination Boat Clubs, Inc., 226 So. 3d 293 (Fla. 2d DCA 2017). A judgment on a fraudulent transfer may not exceed the unpaid amount of the underlying judgment. A $59,900 award against the sole officer was reduced to the $46,552.90 underlying judgment plus prejudgment interest. The separate award against two family members stood, because they were liable only for the $26,900 that reached their joint account.

Euro RSCG Direct Response, LLC v. Green Bullion Financial Services, 872 F. Supp. 2d 1353 (S.D. Fla. 2012). Section 726.108(1)(a) allows avoidance “to the extent necessary to satisfy the creditor’s claim,” so a creditor cannot take a money judgment against transferees for the debtor’s whole debt merely because the transfers they received exceeded it. Chapter 726 supplies no statutory basis for attorney’s fees against a transferee, and the fee demand was struck.

Laptopplaza, Inc. v. Wells Fargo Bank, NA, 264 So. 3d 1049 (Fla. 3d DCA 2019). An order determining liability on Chapter 726 counterclaims but reserving the amount of damages is non-final and non-appealable. The reserved damages were attorney’s fees the creditor sought as part of its § 726.109(2) recovery against a transferee who was not a party to the loan documents, and the court expressly declined to say whether the statute permits such an award.

Invo Florida, Inc. v. Somerset Venturer, Inc., 751 So. 2d 1263 (Fla. 3d DCA 2000). The economic loss rule does not bar a Chapter 726 claim pleaded alongside a breach of the same contract. A fraudulent transfer is an independent tort proved by facts distinct from breach, and two transferees were never parties to the contract. The economic loss rule cannot eliminate a statutory cause of action.

Procedure and Provisional Relief

General Electric Co. v. Chuly International, LLC, 118 So. 3d 325 (Fla. 3d DCA 2013). Prejudgment attachment under § 726.108(1)(b) and § 76.08 is available against assets fraudulently transferred and held in another’s name. The creditor need not prove the transfer fraudulent by a preponderance at that stage; asserting badges makes a prima facie case and shifts the burden. Forgiven multimillion-dollar loans to the debtor’s girlfriend and her company, unrecorded and forgiven during the creditor’s suit, supplied four badges.

LB Judgment Holdings, LLC v. Boschetti, 271 So. 3d 115 (Fla. 3d DCA 2019). A judgment creditor pursuing Chapter 726 claims in proceedings supplementary may record a lis pendens on property held by impleaded entities. The creditor must show a “fair nexus” between the property’s apparent ownership and the dispute, not prove the merits. A ten-million-dollar judgment, three fruitless years of collection, conveyances signed between suit and judgment, and single-purpose entities sharing addresses and counsel supplied that nexus.

Varveris v. Alberto M. Carbonell, P.A., 773 So. 2d 1275 (Fla. 3d DCA 2000). A third party impleaded in proceedings supplementary must be served and made an actual party before her rights are adjudicated, so a judgment ordering her property sold could not stand where she was never properly served. The temporary injunction stood: § 726.108 authorizes provisional remedies, and a court may enjoin before personal service, though it should set a bond.

Trueman Fertilizer Co. v. Allison, 81 So. 2d 734, 738 (Fla. 1955) (en banc). A trustee is an indispensable party to any proceeding affecting the trust estate, subject to an equitable exception for a passive trustee. The court excused joinder here because a dissolved corporation’s directors-trustees were dead or unknown. The bankruptcy court in In re Rensin, 600 B.R. 870 (Bankr. S.D. Fla. 2019), applied the rule to a Chapter 7 trustee’s claim that a Belize trust’s assets were estate property. That claim was dismissed without prejudice, with sixty days to join the Belize trustee.

Lawhon v. Mason, 611 So. 2d 1367 (Fla. 2d DCA 1993). A prejudgment order requiring a tort defendant to give ten days’ notice before transferring any asset over $500 was quashed. It worked as a series of temporary injunctions without the required showing and as a prejudgment attachment lacking the statutory grounds. Hearsay or a subjective belief that the defendant might dissipate assets will not do. The plaintiffs had not yet sued under Chapter 726.

Schrager v. Howland, 46 So. 3d 167 (Fla. 4th DCA 2010). Once the appellate court affirmed the default judgment against the transferee, liability became the law of the case. On remand the trial court could decide only the remedy under §§ 726.108 and 726.109. It could not grant summary judgment on res judicata or collateral estoppel grounds drawn from a bankruptcy court’s earlier findings.

Smith v. Effective Teleservices, Inc., 133 So. 3d 1048 (Fla. 4th DCA 2014). After a debtor makes a Chapter 727 assignment, the equitable interest it retains in fraudulently transferred property belongs to the assignment estate, and only the assignee may bring the Chapter 726 claim. A judgment creditor may sue only after the assignee abandons the claim or sells and assigns it; because the impleader complaint pleaded compliance with all conditions precedent, dismissal was error.

In re Hinton, 378 B.R. 371 (Bankr. M.D. Fla. 2007). Chapter 726 is not the exclusive route: whatever § 56.29 gives a judgment creditor runs alongside Chapter 726, and the two statutes co-exist. The court declined to define § 56.29’s outer boundaries. The set-aside power § 56.29 confers reaches personal property only. A limitations motion was denied as premature while discovery was in its early stages.

Transferee and Adviser Liability

A Florida creditor attacking a fraudulent transfer can pursue the debtor and the transferee, but Chapter 726 creates no claim against the lawyers, advisers, or banks who assisted the transfer without taking control of the property. Chapter 726 does not define “transferee,” and exposure turns on control of the property rather than on having handled it. Other states and the federal circuits divide on whether a lawyer who never received the property can be sued at all, and their decisions divide again on the trust account.

Freeman v. First Union National Bank, 865 So. 2d 1272 (Fla. 2004). Leading case. Chapter 726 creates no cause of action for aiding and abetting a fraudulent transfer against a non-transferee, and its catch-all, § 726.108(1)(c)3, helps carry out the listed remedies rather than creating new causes of action. The court treated First Union, which held the account and wired $8.6 million, as a non-transferee, and footnote 4 confines the answer to Chapter 726, leaving other theories of liability open.

BankFirst v. UBS Paine Webber, Inc., 842 So. 2d 155 (Fla. 5th DCA 2003). A creditor sued the debtor’s attorneys and financial advisers for conspiring to make fraudulent transfers, and the Fifth District affirmed dismissal. In a one-paragraph majority opinion, the court held that neither § 222.30 nor Chapter 726 creates a cause of action against a party who assists a fraudulent conversion or transfer but never takes possession of the property. The dissent would have reinstated a civil-conspiracy count and allowed money damages under the catch-all.

Martinez v. Hutton (In re Harwell), 628 F.3d 1312, 1322–24 (11th Cir. 2010). The mere-conduit defense to transferee liability turns on whether the recipient controlled the funds, and good faith is an independent requirement; the Eleventh Circuit remanded for findings on both control and good faith.

Hyman v. Bast Amron LLP (In re Cargo Transportation Services, Inc.), 502 B.R. 875 (Bankr. M.D. Fla. 2013). A law firm took six $5,000 settlement installments into its trust account as counsel for a plan trustee in another case, paid its court-approved fee, and sent on the balance. The payor filed bankruptcy within ninety days. The judge who decided Harwell on remand held that the firm had served only as a conduit acting in good faith, and granted it summary judgment.

Isaiah v. JPMorgan Chase Bank, N.A., 960 F.3d 1296 (11th Cir. 2020). Routine deposits into a fraudulent scheme’s own bank accounts are not transfers to the bank.

In re Mongelluzzi, 591 B.R. 480 (Bankr. M.D. Fla. 2018). Deposits into the debtor’s own bank accounts are not transfers where the debtor had unfettered access to the funds, so $11.6 million of $12.9 million deposited was beyond reach. Deposits the bank applied to repay overdrafts were transfers, because the bank treated overdrafts as extensions of credit, but even there the debtor received reasonably equivalent value through dollar-for-dollar satisfaction of the overdraft debt, so only the actual-fraud counts survived.

In re Rollaguard Security, LLC, 591 B.R. 895 (Bankr. S.D. Fla. 2018). A debtor’s deposit of its own funds into its own unrestricted account is not a transfer, and even if it were, the depository bank is a mere conduit because it never gains legal control. The conduit theory is an affirmative defense the bank must prove. A bank that only deposited funds into a customer’s account was likewise a conduit in Super Vision International, Inc. v. Mega International Commercial Bank Co., 534 F. Supp. 2d 1326 (S.D. Fla. 2008).

Wiand v. Wells Fargo Bank, N.A., 86 F. Supp. 3d 1316 (M.D. Fla. 2015), aff’d, 677 F. App’x 573 (11th Cir. 2017). A debtor’s payment to a secured creditor is not fraudulent unless the creditor proves the security was inadequate when pledged. Movements of funds among a schemer’s own accounts are not transfers to the bank, which was a mere conduit. Its good faith is judged on the transaction as a whole, and it has no duty to investigate a customer’s account activity. The receiver’s constructive knowledge of recorded mortgages started the four-year clock, so three of four avoidance claims were time-barred.

Huntsman Packaging Corp. v. Kerry Packaging Corp., 992 F. Supp. 1439 (M.D. Fla. 1998), aff’d, 172 F.3d 882 (11th Cir. 1999). Leading case. A “foreclosure” arranged at the debtor’s and buyer’s request, with no written notice of default, is not a regularly conducted, noncollusive sale, so the § 726.104(2) safe harbor did not apply. Assets worth $1.7 million to $3.5 million passed for $807,702.81 and left the company unable to pay its trade creditors. The bank, the buyer, and the debtor’s president were jointly liable, both on the transfer and on a civil conspiracy.

In re PSI Industries, Inc., 306 B.R. 377 (Bankr. S.D. Fla. 2003). A corporation’s release of its officers’ and directors’ loan and stock-subscription obligations, made while insolvent and for less than reasonably equivalent value, is a fraudulent transfer, and these releases were also unauthorized. Board service alone is not participation. Fraud, looting, and conspiracy claims against three passive directors failed because a conspirator must know of the scheme and assist it.

Balsamo v. Gruppo Ceramiche Ricchetti, S.P.A., 862 So. 2d 812 (Fla. 4th DCA 2003). Insider status alone does not expose an officer, director, or shareholder to liability under § 726.106(2) where the transfer went to another corporation rather than to him. Without a transfer to the individual or a veil-piercing order there is no liability. The presumption of insolvency from not paying debts is rebuttable, and a debtor whose assets exceeded liabilities by $326,749 raised a fact question that defeated summary judgment.

Steffen v. Gray, Harris & Robinson, P.A., 283 F. Supp. 2d 1272 (M.D. Fla. 2003). A bankruptcy trustee’s release that preserves “non-bankruptcy causes of action … available to Creditors” does not bar a creditor’s own Chapter 726 action, because the trustee can release only the claims uniquely his. The malpractice claim failed on causation. The creditor could reach the assets whether or not the planning advice had been given.

In re Gosman, 382 B.R. 826 (S.D. Fla. 2007). Once a court has found that a debtor transferred assets intending to defraud creditors, the trustee standing in his shoes cannot argue in a malpractice suit that the debtor would have acted differently but for his lawyers’ advice; collateral estoppel bars it. Dismissal was affirmed on in pari delicto, collateral estoppel, judicial estoppel, and judicial admissions.

Beta Real Corp. v. Lawrence Graham, 839 So. 2d 890 (Fla. 3d DCA 2003). The decision the Fourth District later agreed with in Edwards. A British firm’s partner moved stolen money into a Florida bank account and a Miami condominium held by his offshore company; the long-arm statute gave no jurisdiction over the company, but the court remanded for a constructive trust or equitable lien on the Florida assets, noting that damages could not have exceeded the amounts traceable to the theft anyway.

Edwards v. Airline Support Group, Inc., 138 So. 3d 1209 (Fla. 4th DCA 2014). Receiving a fraudulent transfer is not a “tortious act” under Florida’s long-arm statute. Section 726.108 speaks of avoidance and receivership rather than liability for a wrongful act, and a transferee is not “liable” for receiving one. The complaint also alleged nothing about where the transfer occurred, which alone defeated specific jurisdiction.

BluestarExpo, Inc. v. Enis, 568 F. Supp. 3d 1332 (S.D. Fla. 2021). Chapter 726 targets a transfer by the debtor of assets that could have paid the debt, separate from the transaction that created the debt. A plaintiff who paid $300,000 to a trust and then attacked that same payment sued the wrong transaction; the proper defendant is a transferee that later received funds from the trust. Its position that anyone involved in the payment must return the funds was “simply an incorrect statement of the law,” and the count was dismissed with prejudice.

Menotte v. Vero Beach Country Club, Inc. (In re Mills), 605 B.R. 549 (Bankr. S.D. Fla. 2019). Florida common law indemnity does not apply to a Chapter 726 claim, so a transferee ordered to return money cannot shift the loss to the people who arranged the transfer. Indemnity in Florida reaches personal-injury torts and certain products-liability contract claims, and no Florida court has extended it to a fraudulent transfer. A country club that repaid membership dues paid out of a receivership company therefore could not win indemnity from the members.

Dunn v. Mercantile Commercebank, N.A. (In re GPC Miami Inc.), 582 B.R. 534 (Bankr. S.D. Fla. 2018). A bank sued as directly liable for receiving a transfer has no indemnity claim against another bank sued the same way, because it is not answering for the other’s wrongdoing and the special relationship indemnity requires is missing. The court did not decide whether Florida allows common law indemnity in fraudulent transfer cases at all; Mills later held it does not.

Homestead and Equitable Liens

Florida’s homestead exemption survives a debtor’s intent to hinder, delay, or defraud creditors in acquiring the home, but it does not shield money traceable from a fraud into the house. The house takes an equitable lien for that money.

Havoco of America, Ltd. v. Hill, 790 So. 2d 1018 (Fla. 2001). Leading case. Sections 222.29 and 222.30 do not reach the constitutional homestead. A homestead bought with non-exempt funds, even with intent to hinder, delay, or defraud creditors, is not excepted from the Florida Constitution’s article X, section 4.

Wiand v. Lee, 574 B.R. 286 (Bankr. M.D. Fla. 2017), aff’d, Lee v. Wiand, 603 B.R. 161 (M.D. Fla. 2018). A Florida homestead is subject to an equitable lien and constructive trust to the extent Ponzi-scheme fraudulent transfers are traceable into it. The owner’s innocence is irrelevant because the issue is unjust enrichment, not fraud. Tracing follows the lowest intermediate balance rule: withdrawals from a commingled account are presumed to come from the owner’s untainted funds first, so only the lowest intermediate balance remains traceable. No Florida appellate court has ratified the ruling.

In re Gosman, 362 B.R. 549 (Bankr. S.D. Fla. 2007). An equitable lien on a Florida homestead requires two things: money obtained through fraud or egregious conduct, and that money invested in or used to buy or improve the homestead. A debtor who mortgaged the homestead despite a loan covenant did neither. The lender’s claimed lien on $41.35 million of sale proceeds failed as a matter of law, because merely encumbering a homestead is not investing fraud proceeds in it.

In re Lapes, 254 B.R. 501 (Bankr. S.D. Fla. 2000). A debtor bought a Florida homestead using funds directly traceable to a creditor’s converted collateral, through transfers made intending to defraud. He did not keep it. The creditor could avoid every transfer leading to the purchase, take an equitable lien securing its $554,041.92 claim, and force a sale. This was someone else’s traceable property, not the debtor’s own non-exempt assets converted innocently.

In re Young, 235 B.R. 666 (Bankr. M.D. Fla. 1999). Two years before Havoco, the bankruptcy court held that converting non-exempt assets into a Florida homestead is not among the constitution’s three exceptions and declined to create a fourth. A sequence of events alone is not evidence of intent to hinder, delay, or defraud.

Grass v. Great American Bank of North Miami Beach, 414 So. 2d 561 (Fla. 3d DCA 1982). Decided before Chapter 726, the case holds that a debtor’s conveyance of an established homestead to his mother could not defraud the judgment creditor, because the homestead was already beyond that creditor’s reach. A finding that a financial statement was false “or in error” is not the conclusive showing of fraud required to defeat the exemption.

In re Short, 188 B.R. 857 (Bankr. M.D. Fla. 1995). Because a Florida homestead is exempt, its disposition cannot be the product of an intent to defraud creditors, who would have had no claim to it either way. A judgment debtor transferred his homestead interest to his wife nine months before filing. The transfer could not be avoided under § 544(b) and § 726.105 or under § 548(a)(1), and it could not support denial of discharge.

Section 222.30 Requires a Conversion by the Debtor

Section 222.30 reaches a debtor who converts non-exempt assets into exempt form intending to hinder, delay, or defraud a creditor; the conversion alone is not evidence of that intent. The claim is extinguished four years after the conversion.

Mehdipour v. Rensin (In re Rensin), 600 B.R. 870 (Bankr. S.D. Fla. 2019). The trustee of the debtor’s offshore trust used trust funds to buy a Florida annuity for him; because § 222.30 requires a conversion by the debtor, and the trustee rather than the debtor made the purchase, the § 222.30 claim failed. The ruling was mixed. Both sides’ summary-judgment motions were granted in part and denied in part, and the debtor’s homestead claim was denied under § 522(o).

In re Jennings, 332 B.R. 465 (Bankr. M.D. Fla. 2005). A $500,000 single-premium annuity bought while a personal-injury suit was pending was a fraudulent asset conversion under § 222.30. Sections 222.30 and 726 are read in tandem, and § 222.30 carries no size limitation, so converting even a small part of a debtor’s assets can be avoided. A claimed retirement-planning motive did not rebut the badges where the debtor drew no salary and chose a single-premium product.

BluestarExpo, Inc. v. Enis, 568 F. Supp. 3d 1332 (S.D. Fla. 2021). A § 222.30 claim must identify the assets converted and how the conversion rendered them immune or exempt. A general allegation that the defendants “changed or disposed of” funds that had become exempt, with no supporting facts, does not state the claim, and the count was dismissed with prejudice.

What Counts as a Transfer

Chapter 726 treats every direct or indirect way a debtor parts with an asset as a transfer, including a release, a satisfaction of judgment, an unequal divorce division, a trust amendment, and an unrecorded deed.

Nationsbank, N.A. v. Coastal Utilities, Inc., 814 So. 2d 1227 (Fla. 4th DCA 2002). Leading case. The definition of “transfer” reaches every direct or indirect mode of parting with an asset. One joint tenant who lets the other withdraw a disproportionate share of a joint account therefore makes a transfer, though he never touched the money. A joint tenancy with right of survivorship is not tenancy by the entireties; shares are presumed equal, and a creditor may attach the debtor tenant’s portion. Its “only in extraordinary circumstances” summary-judgment rule is the one Mane abandoned.

In re Crawford, 172 B.R. 365 (Bankr. M.D. Fla. 1994). Amending a revocable trust to make it irrevocable and resigning as trustee is a transfer, because the settlor parts with an interest she could previously have reached at will. A judgment debtor, the debtors’ mother, who took those steps two weeks after the trustee’s adversary proceeding was filed, for no consideration and while insolvent, made a transfer avoidable under §§ 726.105 and 726.106(1); failing health was no answer.

In re Lankry, 263 B.R. 638 (Bankr. M.D. Fla. 2001). An unjustified unequal division of marital property or liabilities in a dissolution is a transfer avoidable under Chapter 726. The trustee must prove that the item was marital property, that the division shortchanged one spouse’s creditors, and that no factor Florida law recognizes justified the departure. The divorce court’s approval of the agreement binds no creditor who was not a party. Entireties property loses its carve-out from “asset” on dissolution, when it becomes a tenancy in common under § 689.15.

In re NuMed Home Health Care, Inc., 326 B.R. 859 (Bankr. M.D. Fla. 2005). A release the defendant relies on as an affirmative defense is itself a transfer that can be attacked under § 544(b) and §§ 726.105 and 726.106. Because the release’s avoidability had to be tried, it could not support summary judgment on the claims it purported to bar.

Sasha & Sasha, Inc. v. Stardust Marine, S.A., 741 So. 2d 558 (Fla. 4th DCA 1999). An unrecorded deed is still a transfer. Section 726.107(2) postpones its date, deeming the transfer made immediately before the action was commenced, so the trial court erred when it treated the unrecorded purchaser as no transferee. The judgment was affirmed on other grounds, because the escrow arrangement suggested the deed was never delivered.

In re Mizrahi, 179 B.R. 322 (Bankr. M.D. Fla. 1995). Under § 726.107(1) a transfer of real property is made when it is perfected against a bona fide purchaser, so the operative date is recording, not the date of the deed. Entireties property is no shield where joint creditors exist who could reach it, so moving it into a family trust for no consideration, the day before a multimillion-dollar judgment, was avoidable under § 726.105(1)(b).

Who Counts as a Creditor

A creditor under Florida’s fraudulent-transfer statute is anyone holding a claim, and a claim need not be matured, liquidated, or reduced to judgment.

Friedman v. Heart Institute of Port St. Lucie, Inc., 863 So. 2d 189 (Fla. 2003). Leading case. A claimant without a judgment is still a creditor and may proceed under Chapter 726. A dependent fraudulent-transfer claim is not automatically stayed; a stay rests in the trial court’s discretion, and the physician who moved over $400,000 of home-sale proceeds to his fiancée got none. The Court disapproved the Third District’s contrary holding and cited with approval the Second District’s 1962 holding in Money v. Powell that contingent creditors and tort claimants are protected.

Bedwell v. Rucks, 127 So. 3d 533 (Fla. 4th DCA 2012). Chapter 726 requires only that the creditor’s claim, a right to payment whether matured or disputed, arose before the transfer; damages on the underlying claim are not an element, and the creditor need not first reduce the claim to judgment. A fraudulent-transfer claim accrues when the transfer occurs, so venue lies where the transfer happened rather than where the underlying injury occurred.

Sallah v. Worldwide Clearing LLC, 860 F. Supp. 2d 1329 (S.D. Fla. 2011). A receiver appointed over a Ponzi-scheme entity may bring Chapter 726 claims, because once the corporation is “cleansed” through receivership it becomes a creditor as to assets its principals transferred away. Recipients of the corporate assets are transferees whether or not they knew of the principals’ wrongdoing, and in pari delicto does not bar the receiver at the pleading stage.

Wiand v. ATC Brokers Ltd., 96 F.4th 1303 (11th Cir. 2024). A federal equity receiver appointed over the entities used to run a Ponzi scheme may bring Chapter 726 claims against a transferee. Once the wrongdoers are removed, the entities regain standing to sue for the return of money transferred away. The receiver has no standing to press the investors’ own tort claims, which should have been dismissed without prejudice.

What Counts as an Asset

An asset under Chapter 726 is property a creditor could have reached, so property fully encumbered by a valid lien, exempt property, entireties property beyond a single spouse’s creditor, and bare legal title held for someone else fall outside the statute.

2-Bal Bay Properties, LLC v. Asset Management Holdings, LLC, 291 So. 3d 617, 620 (Fla. 2d DCA 2020). Property encumbered by a valid lien when transferred is not an “asset” under § 726.102(2)(a), and a transfer of a non-asset cannot be avoided. The question is whether a valid lien encumbered the property when it was transferred, not whether it remained encumbered afterward.

Yaralli v. American Reprographics Co., LLC, 165 So. 3d 785 (Fla. 4th DCA 2015). A shareholder whose advances were loans rather than equity holds a claim and is a creditor, so he may sue the transferee directly under § 726.105 rather than derivatively. Goodwill and customer data can be assets of a fraudulent transfer even where equipment and customers stayed put, so fact issues on two badges defeated summary judgment.

RREF SNV-FL SSL, LLC v. Shamrock Storage, LLC, 250 So. 3d 788 (Fla. 1st DCA 2018). Transferring an asset worth nothing cannot be constructive fraud, because it is impossible to receive less than reasonably equivalent value for it, so a husband’s gift of motel-company stock to his wife survived attack. A claim exists before default or judgment. Under § 56.29(3)(a), the year runs from when the debtor was served in the original action. The debtor must prove a transfer into a spouse’s or relative’s name was not made to delay, hinder, or defraud creditors.

In re Todd, 391 B.R. 504 (Bankr. S.D. Fla. 2008). A debtor holding only bare legal title under a resulting trust has an economically worthless interest. Passing that title on for nothing is not constructive fraud, because nothing of value left the estate. It is not actual fraud either, because a debtor cannot intend to defraud creditors by transferring something she has no economic interest in.

Barbee v. Amerant Bank (In re Luna Developments Group, LLC), 618 B.R. 595 (Bankr. S.D. Fla. 2020). Sale proceeds already covered by a lender’s perfected security interest were not an “asset” under § 726.102(2)(a), so moving them into a pledged account and applying them to the debt were not avoidable transfers. Granting the lien in the account was no transfer either, because the account was empty at creation and funded with already-encumbered money. To attack a payment on a pre-existing mortgage, the plaintiff must show the lien did not effectively secure the debt.

Reasonably Equivalent Value

Constructive fraud requires no proof of intent, only that the debtor gave up an asset without receiving reasonably equivalent value while insolvent or left insolvent by the transfer. Value is judged on each transaction as it stood when it happened.

In re Toy King Distributors, Inc., 256 B.R. 1 (Bankr. M.D. Fla. 2000). Leading case. Section 726.106 is the state-law equivalent of 11 U.S.C. § 548(a)(1)(B) and substantially the same, except that it benefits only a creditor whose claim arose before the transfer. Every transfer at issue was actually fraudulent and most were also constructively fraudulent, but payments of loan principal, loan fees, and one interest payment were not, having been made on genuine antecedent debt. Recovery under § 726.109(2) is capped at the creditor’s claim or the avoided transfer’s value, whichever is less.

In re Venice-Oxford Associates, 236 B.R. 820 (Bankr. M.D. Fla. 1999). The court analyzed Florida’s two constructive-fraud subsections together with the Bankruptcy Code’s own constructive-fraud provision, and noted that the Florida sections carry no one-year pre-petition limit. Satisfying or partly satisfying an antecedent debt is reasonably equivalent value, so a mortgagor whose foreclosed rents had to be applied against a debt exceeding $6.69 million received value. The court entered summary judgment for the mortgage holders on all three avoidance counts.

The constructive-fraud test. Constructive fraud requires less than reasonably equivalent value plus one more element: remaining assets unreasonably small, an intent or reasonable expectation of debts beyond the ability to pay as they came due, or insolvency caused by or present at the transfer. The test is stated the same way in Wells Fargo Bank v. Barber, 85 F. Supp. 3d 1308 (M.D. Fla. 2015), and In re Venice-Oxford Associates, 236 B.R. 820, 834 (Bankr. M.D. Fla. 1999). It is restated in In re Sigma-Tech Sales, 570 B.R. 408, 417 (Bankr. S.D. Fla. 2017).

What Counts as Value

Berdoll v. Sobik’s Franchises, Inc., 681 So. 2d 1164 (Fla. 5th DCA 1996). Florida’s adoption of the Uniform Fraudulent Transfer Act made substantive changes: prior law required actual fraudulent intent and accepted “good consideration,” while the Act requires reasonably equivalent value. Franchise agreements worth at least $7,500 went to an affiliate that paid unquantified bills, probably nominal rent, and assumed duties it would have had to assume anyway. Evidence of “some consideration” does not establish reasonably equivalent value.

In re Mongelluzzi, 587 B.R. 392 (Bankr. M.D. Fla. 2018). Reasonably equivalent value compares what left the debtor with what came back, counting direct and indirect benefits; once the plaintiff shows no reasonably equivalent direct benefit, the defendant must prove an indirect one. A bank cannot supply that value by asserting a “common enterprise,” which invokes substantive consolidation and alter ego and fails unless those doctrines’ own prerequisites are met. Failure to pay a single creditor did not raise the presumption of insolvency.

Arbor Grove Development, LLC v. ECS1, Inc., No. 3D24-1975 (Fla. 3d DCA Nov. 12, 2025). “Value” is broader than money. A transferee’s assumption of the transferor’s mortgage debt and responsibility for outstanding contractor claims and liens is evidence of reasonably equivalent value, so a trial court errs when it reasons that a transferor who received no cash received nothing. The slip opinion was not final when issued, pending any motion for rehearing.

United States v. Executive Auto Haus, Inc., 234 F. Supp. 2d 1253 (M.D. Fla. 2002). A transferee’s agreement to satisfy the transferor’s known debts is reasonably equivalent value as a matter of law where the obligations assumed exceeded the amount transferred, so neither § 726.106(1) nor § 726.106(2) reached the transfer. A tax liability that surfaced more than a year later was a “claim” but did not make the debtor insolvent in hindsight.

In re Tower Environmental, Inc., 260 B.R. 213 (Bankr. M.D. Fla. 1998). A debtor entered an arm’s-length criminal plea agreement obligating it to pay $1.86 million in restitution, investigative costs, and a fine. It received reasonably equivalent value: the agreement compromised a realistic risk of larger fines, and the installments satisfied an antecedent debt of equal value. That the obligation also benefited third parties does not defeat value as to the debtor.

In re Leneve, 341 B.R. 53 (Bankr. S.D. Fla. 2006). Repayments of $507,215 to a woman who had invested $700,000 were not avoidable. An investor in a fraudulent scheme is a creditor entitled to the return of principal, so repayment up to that amount is reasonably equivalent value. Preferring one creditor over others is not itself evidence of intent to defraud.

In re Seaway International Transport, Inc., 341 B.R. 333 (Bankr. S.D. Fla. 2006). A corporation’s payments on its sole owner’s home mortgage were supported by reasonably equivalent value where the owner drew no salary and his services were worth at least the amounts paid. A transfer conferring an indirect economic benefit leaves the debtor’s net worth intact and is not avoidable, even though the accounting was irregular.

In re 21st Century Satellite Communications, Inc., 278 B.R. 577 (Bankr. M.D. Fla. 2002). Summary judgment was denied both ways. Value is judged on each transaction as it stood at the time. A debtor that paid commissions for investments actually procured received a quid pro quo, and a later SEC determination that the investments were unregistered securities did not retroactively strip that value. Commissions are recoverable only where the broker knowingly joined a scheme fraudulent from the start, which remained disputed.

Wiand v. Waxenberg, 611 F. Supp. 2d 1299 (M.D. Fla. 2009). The question is whether the debtor received value, not whether the creditor did, and a debtor may receive reasonably equivalent value by paying a spouse’s household expenses. Whether a Ponzi scheme existed and whether the operator’s wife took in good faith were jury questions, so the receiver’s motion was denied; the wife won summary judgment on the constructive-fraud counts as to the return of her principal.

Herendeen v. Regions Bank (In re Able Body Temporary Services, Inc.), 626 B.R. 643 (Bankr. M.D. Fla. 2020). Affiliated debtors that share an identity of interests receive reasonably equivalent value from a payment that benefits only one of them, because what benefits one benefits the others. The doctrine looks at the group’s economic reality and is separate from the “common enterprise” theory the same court rejected in Mongelluzzi, which required proof of substantive consolidation or alter ego. The bank carried its burden, and the loan payments survived both fraud theories.

Furr v. George (In re Royalty Investments & Finance, LLC), 655 B.R. 393 (Bankr. S.D. Fla. 2023). An agreement that is void, unenforceable, or illegal can still supply reasonably equivalent value. Only conduct the law forbids outright can never be worth anything; the court’s examples were murder for hire, prostitution, and private gambling debts. Referral payments to an adviser who may have acted as an unregistered dealer were reasonably equivalent value, because Florida permits the work when the person is registered. The trustee had to prove every element by a preponderance and did not.

2408 W Kennedy LLC v. Bank of Central Florida, 654 B.R. 814 (M.D. Fla. 2023). The price a regularly conducted foreclosure sale brings is reasonably equivalent value as a matter of law under BFP v. Resolution Trust, so alleging only that a foreclosure transferred an interest for less than its worth states no claim. A credit bid rather than cash is not consideration-free. Florida’s §§ 726.105 and 726.106 track 11 U.S.C. § 548(a)(1)(B) closely enough that courts apply the same analysis to both. On remand the adversary proceeding was dismissed on preclusion grounds.

Proving the Shortfall

Rodriguez v. Nieves, 75 So. 3d 339 (Fla. 3d DCA 2011). In a § 726.106(1) claim brought in proceedings supplementary the creditor carries all three elements, including the absence of reasonably equivalent value; proving that the claim predated the transfer and that the debtor was insolvent is not enough. The creditors showed no equity in the deeded property when it was transferred and no answer to recorded mortgages securing loans the transferee brother had advanced, and a sale more than a year later does not establish value as of the transfer.

In re Dealers Agency Services, Inc., 380 B.R. 608 (Bankr. M.D. Fla. 2007). The transfer of a company’s assets to a new entity was avoided as actual fraud on an insider transferee, an undisclosed transfer, a pending lawsuit, substantially all assets, resulting insolvency, and a contract price never paid. The constructive-fraud counts failed because the trustee proved neither what went out nor what came back; the same facts can establish actual fraud and still leave reasonably equivalent value unproven.

In re Vilsack, 356 B.R. 546 (Bankr. S.D. Fla. 2006). A sales associate’s assignment of his right to future real-estate commissions can be attacked as a transfer lacking reasonably equivalent value. The question is what the right was worth when the assignment was signed, twenty-three months before the sale closed. Disputed facts precluded summary judgment either way, so the ruling decided no merits.

Woodell v. TransFlorida Bank, 717 So. 2d 108 (Fla. 4th DCA 1998). A complaint alleged that a bank and its controlled corporations sold property to the judgment debtors’ corporation, took back a mortgage exceeding fair market value, and left the debtors in possession, knowing of the judgments. That states claims under all three constructive-fraud and actual-fraud sections. A voluntary conveyance by an indebted person is presumptively fraudulent when a judgment creditor attacks it on a debt existing when it was made.

Profilet v. Cambridge Financial Corp., 231 B.R. 373 (S.D. Fla. 1999). A Chapter 11 trustee pleaded prima facie constructive-fraud claims by alleging that the defendants obtained stock while the debtor was insolvent and without its receiving reasonably equivalent value. Rule 9(b)’s particularity requirement is relaxed where the plaintiff is a bankruptcy trustee, who inevitably lacks knowledge of frauds committed before he arrived.

In re All American Semiconductor, Inc., 490 B.R. 418 (Bankr. S.D. Fla. 2013). A constructive-fraud count states a claim where the complaint pleads that the payments bought an enterprise software system that “completely failed and eviscerated the value” of the debtor. On that theory what the debtor bought had no value, so it received nothing reasonably equivalent; the insolvency allegations were likewise sufficient.

Insolvency and How It Is Proved

A debtor is insolvent under Chapter 726 when debts exceed assets at a fair valuation and is presumed insolvent when generally not paying debts as they come due. The party attacking the transfer carries the burden of proving insolvency.

In re Teltronics, Inc., 904 F.3d 1303 (11th Cir. 2018). On a constructive fraudulent-transfer claim under §§ 726.105(1)(b) and 726.106(1), the party seeking avoidance bears the burden of proving insolvency by a preponderance. The bankruptcy court credited unrebutted expert testimony that three long-running maintenance contracts belonged on the balance sheet as assets, and the trustee’s failure to offer any evidence of their worth defeated the insolvency element and ended the case.

Levin v. Ethan Allen, Inc., 823 So. 2d 132 (Fla. 4th DCA 2002). A judgment holder is a “creditor” because a claim is a right to payment whether or not reduced to judgment. A debtor generally not paying its debts is presumed insolvent, and whether a large judgment in the debtor’s own favor, then on appeal, rebuts the presumption is a fact question on which the debtor carries the burden. Granting a third mortgage to an insider entity without value while insolvent satisfied § 726.106(1), which requires no intent.

Manchec v. Manchec, 951 So. 2d 1026 (Fla. 4th DCA 2007). The former husband’s own divorce financial affidavits, judicially noticed, established that his debts exceeded his assets, and because he was generally not paying his debts he was presumed insolvent. His son pledged 25% of future royalties on an aeronautical invention and received a $120,000 airplane. The pledge was an “unperformed promise” under § 726.104(1) and not value, there being no sales, no projected sales, and uncertain FAA approval.

Gass v. Comreal Miami, Inc., 653 So. 2d 1069 (Fla. 3d DCA 1995). Sale proceeds went into a joint account held with the wife eighteen months before the creditor sued and were spent openly on ordinary living expenses; that showed insufficient badges. The husband’s testimony that he needed money and was in financial straits was, without more, not substantial competent evidence of insolvency under § 726.103, so the finding could not stand.

In re Mid-Continent Electric, Inc., 278 B.R. 607 (Bankr. M.D. Fla. 2002). A company pledged all its assets to secure its principal’s $2 million personal borrowing, used to buy out the other shareholder. The buyout rendered the company insolvent by $395,820, and the security agreement was avoided under § 544(b) and § 726.106(1). The party attacking the transfer bears the burden on resulting insolvency; if the evidence stands in equilibrium the claim fails.

In re Universal Health Care Group, Inc., 560 B.R. 594 (Bankr. M.D. Fla. 2016). Allegations that a company borrowed $37.5 million to redeem preferred stock for $33.4 million, wiping out its equity and burdening it with senior secured debt, state a plausible constructive-fraud claim. Insolvency is a fact question of fair valuation that a lender’s willingness to lend does not resolve on the pleadings, and arm’s-length negotiation does not establish reasonably equivalent value, because a company gains no net value by redeeming its own stock.

In re Aerial Transit Co., 190 B.R. 464 (Bankr. S.D. Fla. 1996). In a debt-financed buyout the selling shareholders took back a note and aircraft mortgages purportedly funded by a check drawn on an account holding ten dollars, never made good. There was no consideration. The obligation and the payments on it were constructively fraudulent under § 726.105(1)(b), because the company knew at closing it had no cash and no means to pay its short-term debt. Balance-sheet solvency is not the test under § 726.105(1)(b).

The Good-Faith Transferee Defense

A transferee who wants to keep what it received must prove both that it gave value and that it took in good faith, and good faith is measured objectively by what a prudent recipient would have discovered.

In re World Vision Entertainment, Inc., 275 B.R. 641 (Bankr. M.D. Fla. 2002). Leading case. Good faith under § 726.109(1) and § 548(c) is judged objectively, recipient by recipient, and the transferee bears the burden. Knowledge that would put a reasonable person on inquiry notice of the debtor’s fraudulent purpose or possible insolvency defeats the defense. Brokers who sold the debtor’s notes relying on brochures and a cursory rating check failed it. Value is measured on the precise transfer, not its worth to the whole enterprise, so the commissions themselves were reasonably equivalent value.

In re Pearlman, 440 B.R. 900 (Bankr. M.D. Fla. 2010). Even where the Ponzi-scheme presumption applies, payments in furtherance of the scheme are not automatically avoidable; the court must assess each recipient’s good or bad faith. The transferee bears the burden of proving both value and good faith by a preponderance. Good faith reaches imputed knowledge. A transferee who knew facts that would have led a prudent person to inquire, and whose inquiry would have uncovered the fraud, cannot claim it.

In re Berkman, 517 B.R. 288 (Bankr. M.D. Fla. 2014). Reasonably equivalent value is measured from the debtor’s point of view and need not be dollar for dollar; satisfying legitimate antecedent debts is value as a matter of law. Good faith is objective and fails on facts that would prompt an ordinarily prudent person to inquire. A Chapter 7 trustee who took $4,750,000 under a global settlement kept it, having required counsel’s certification of the funds’ source and a court finding of a good-faith transaction.

In re Seminole Walls & Ceilings Corp., 446 B.R. 572 (Bankr. M.D. Fla. 2011). The § 726.109(1) defense belongs to the transferee, who must prove it. Good faith asks whether the transferee knew facts that would have led a prudent person to inquire and whether that inquiry would have uncovered the fraudulent purpose. A buyer took the debtor’s most valuable asset on the eve of Chapter 7 conversion, knowing the debtor was insolvent and that the confirmed plan promised the proceeds to other creditors. That was bad faith, and the transfer was avoided in full.

In re Lydia Cladek, Inc., 494 B.R. 555 (Bankr. M.D. Fla. 2013). In a Ponzi case the transferee gives value up to the principal invested, and only payments above principal are recoverable. The good-faith-and-value defense is available even to a Ponzi recipient, is judged by a two-part inquiry-notice test, and is fact-intensive, so it is generally unsuited to summary judgment. If a Chapter 726 claim was alive on the petition date, § 546(a) gives the trustee two years after the petition to bring it.

Insider Transfers and Preferences

Florida has no preference statute like the Bankruptcy Code’s, but Chapter 726 makes a transfer to an insider for an antecedent debt fraudulent where the debtor was insolvent and the insider had reasonable cause to believe it.

National Maritime Services, Inc. v. Straub, 776 F.3d 783 (11th Cir. 2015). Leading case. Reasonably equivalent value is not an element of § 726.106(2) or any defense to it. A transfer to an insider on an antecedent debt, made while the debtor was insolvent and the insider had reasonable cause to know it, is fraudulent without more. The § 726.109(6) new-value defense requires value given after the transfer, so releasing an antecedent debt does not qualify. A federal court has ancillary jurisdiction over a § 56.29 proceeding where the creditor seeks only the transferred asset.

Mansolillo v. Parties by Lynn, Inc., 753 So. 2d 637 (Fla. 3d DCA 2000). Eight company trucks conveyed for nothing to an officer and director, the operator’s mother, were a fraudulent transfer. An insider may not accept payment of an antecedent debt while the debtor is insolvent unless other creditors are paid first, and absent any plausible explanation, the inference that the trucks answered her debt stood. Recovery is capped under § 726.109(2), but prejudgment interest is added, so the total may exceed both the judgment and the amount conveyed.

Mied, Inc. v. Summit Healthcare Inc., 849 So. 2d 397 (Fla. 4th DCA 2003). Officers and directors held consent judgments against their insolvent corporation and were paid interest on them out of a sale’s proceeds. They were fraudulent transferees under § 726.106(2); the statute draws no distinction between insider creditors who hold judgments and those who do not.

In re Preferred Aluminum, Inc., 131 B.R. 889 (Bankr. M.D. Fla. 1991). Section 726.106(2) requires that the insider had reasonable cause to believe the debtor was insolvent, and that element defeated the claim. The defendant held more than half the stock and signed every check. But the president left the office whenever he arrived, told employees not to show him the books, and told the accountant not to discuss the company. Where so many steps were taken to keep an insider ignorant, he cannot be charged with reasonable cause.

Yeager v. Summit Group of Central Florida, Inc., 654 So. 2d 189 (Fla. 5th DCA 1995). Commissions routed to a dissolved corporation’s sole stockholder were a fraudulent transfer under § 726.106(2). The ordinary-course safe harbor did not apply. A dissolved company pays nobody in the ordinary course, and a non-lender stockholder’s undocumented six-figure advances are as extraordinary as an emergency bail-out loan. An insider who must restore a fraudulent transfer may not share pro rata in the distribution.

In re Blitstein, 105 B.R. 133 (Bankr. S.D. Fla. 1989). The debtor transferred a half interest in an office building to his brother’s corporation, receiving no real consideration and acting after a major creditor threatened suit; the transfer was set aside on the classic badges. The entireties defense failed, because creating a tenancy by the entireties to place property beyond creditors, which the debtor had done earlier while creditors pursued him, is itself a fraud on them. The transferee bears the burden of showing good faith.

Successor Companies and Alter Ego

Moving a business into a new company with the same owner, customers, and telephone number leaves the new company liable for the old one’s debts and supplies the badges of fraud.

Amjad Munim, M.D., P.A. v. Azar, 648 So. 2d 145 (Fla. 4th DCA 1994). Leading case. A physician formed a new professional association twelve days after a judgment against his old one, moved the practice, staff, equipment, and patient files across free, and controlled both. That was a fraudulent transfer. Fraud is presumed where assets pass between commonly controlled corporations and prejudice creditors. Under the pre-2016 § 56.29(6), the impleaded transferee bore the burden of disproving fraud. Assets of minimal independent value can be fraudulently transferred where the transfer strips the debtor’s earning capacity.

In re Aqua Clear Technologies, Inc., 361 B.R. 567 (Bankr. S.D. Fla. 2007). Eight of the eleven badges were present where the principals stripped the company and opened a clone three weeks after the filing with the same officers, customers, location, and telephone number. The successor was the debtor’s alter ego and mere continuation, liable for all $108,732.64 of its scheduled liabilities, and the principals were jointly liable for $24,972.12 in transfers. Section 726.108 supports an injunction and an accounting.

Laboratory Corp. of America v. Professional Recovery Network, Inc., 813 So. 2d 266 (Fla. 5th DCA 2002). Customer relationships, receivables, an accounting system, and a database are assets capable of fraudulent transfer even though customers were free to leave and the items had little standalone value. The test is whether the transfer stripped the debtor’s means of earning revenue to pay the judgment. Those items moved to a successor for nothing, so summary judgment for the successor was error.

Exempt and Entireties Property

A transfer of property the creditor could never have reached is not a fraudulent transfer, whatever the debtor intended, because exempt and entireties property is not an asset under Chapter 726.

Exempt property is not an asset. Property absolutely exempt from creditors is not an “asset” under Chapter 726, so its transfer cannot be attacked as fraudulent no matter what the debtor intended. Section 726.102(2)(c) likewise excepts entireties property beyond a single spouse’s creditor. The district court refused to resolve the entireties branch on the pleadings in In re McCuan, 569 B.R. 511, 517–21 (M.D. Fla. 2017), reversing a dismissal.

Dean v. Heimbach, 409 So. 2d 157 (Fla. 1st DCA 1982). A transfer of homestead property is not a fraud on creditors, whatever the transferor’s motive, because a judgment creditor acquires no rights in property the law never let it reach. The First District reversed a judgment setting aside two conveyances of a home and dismissed the suit, even though the trial judge had found on ample evidence that the owner conveyed it to protect it from execution. The home was homestead before and after the conveyance, so the creditor lost nothing it could reach.

In re Mathews, 360 B.R. 732 (Bankr. M.D. Fla. 2007). Moving exempt property, or loan proceeds drawn against it, into other exempt property is not a fraudulent transfer, because a debtor can defraud creditors only by disposing of property they could have reached. Creditors have no complaint about dealings with property the law never allowed them to touch, even where the purpose is to hinder, delay, or defraud. Because entireties loan proceeds paid off an entireties homestead, 11 U.S.C. § 522(o) was not triggered.

In re Hampton, 616 B.R. 917 (Bankr. S.D. Fla. 2020). A debtor cannot fraudulently transfer the exempt equity in her homestead, because that equity was never available to satisfy creditor claims. The debtor drew $251,000 on her home equity line before filing and passed $60,000 of it to her son. Those draws had no legal effect on the exemption she claimed in the remaining equity. Under Havoco, acquiring a homestead with intent to defraud is still exempt, so withdrawing equity, which reduces the exemption, cannot be an abuse of it.

In re Davis, 403 B.R. 914 (Bankr. M.D. Fla. 2009). A judgment against the transferee spouse for the value of a voidable transfer is not the same as avoiding it. The debtor moved $2.2 million into an entireties account on his wedding day and used $1.9 million three days later to buy a home. The earlier civil judgment reached only the first transfer; the second was never avoided and could not be, given the homestead exemption, so the entireties exemption stood. A fraudulent transfer does not automatically destroy a tenancy by the entireties.

In re Davidson, 164 B.R. 782 (Bankr. S.D. Fla. 1994), aff’d in part, rev’d in part, 178 B.R. 544 (S.D. Fla. 1995). The day before judgment, the debtor moved $144,766 out of a joint account and bought a $100,000 annuity. The bankruptcy court denied her discharge but let the annuity exemption stand, reasoning that no Florida law then forfeited an exemption for fraudulent conduct. The district court reversed that ruling: §§ 726.105 and 726.108 were in force when the annuity was bought and would appear to let the creditor avoid the purchase.

In re Covino, 187 B.R. 773 (Bankr. S.D. Fla. 1995). Taking one’s own medical-malpractice settlement as an annuity is not an avoidable fraudulent transfer where the claimant was entitled to the proceeds and needed the stream for medical expenses and support; the court doubted the election is a transfer at all. Routing a share of the same entitlement into an annuity for the debtors’ minor son was avoidable under § 726.106(1), because the son had no entitlement and nothing came back while the debtors were insolvent.

Puleo v. Golan, 201 So. 3d 37 (Fla. 3d DCA 2014). A postnuptial agreement declaring that everything either spouse owns is held by the entireties is no shield against a judgment creditor. It fixed the spouses’ rights between themselves, was unrecorded and undisclosed, and the spouses’ own conduct contradicted it. Retitling ten million shares into joint names two months after the creditor moved for fees, and receiving nothing, was a transfer lacking reasonably equivalent value that carried several badges the spouses failed to rebut.

Tardif v. McCuan (In re McCuan), 569 B.R. 511 (M.D. Fla. 2017). Whether an account is held by the entireties cannot be decided on a motion to dismiss when the complaint alleges the unities are missing. A Chapter 7 trustee alleged that adding the debtor’s wife to his existing investment account in 2008 created no entireties ownership. The bankruptcy court dismissed with prejudice, holding the account entireties property and so exempt from Chapter 726. The district court reversed and vacated that order and remanded, because a presumption of entireties ownership is rebuttable.

Transfers Before the 1988 Act

Chapter 726 replaced Florida’s 1823 fraudulent-conveyance statute, § 726.01, on January 1, 1988, without reaching earlier transfers. Section 726.01 required proof of actual intent and accepted good consideration, though the legislature carried its principles into the current act.

In re Smith, 110 B.R. 597 (Bankr. M.D. Fla. 1990). Florida’s Uniform Fraudulent Transfer Act, effective January 1, 1988, does not apply retroactively to earlier transfers. The legislature showed no clear intent to give it retrospective effect, and because § 726.01 required proof of the transferor’s actual intent while the new act does not, retroactive application would create new rights and disturb vested ones.

Advest, Inc. v. Rader, 743 F. Supp. 851 (S.D. Fla. 1990). Moving assets from an individual brokerage account into a joint account with a spouse ordinarily puts them beyond the individual’s creditors unless the transfer is clothed in fraud. A trustee retitled his accounts thirteen days after his wedding, while the beneficiaries pressed a challenge he expected to lose; three badges raised an inference of intent the Raders never rebutted. Section 726.01 governed the pre-1988 transfer, but the result was the same under § 726.106, and § 726.111 preserves the older law’s principles unless displaced.

Badges Under the Old Statute

Cleveland Trust Co. v. Foster, 93 So. 2d 112 (Fla. 1957). A debtor deeded her property, eight days after being served, to a companion who admitted the purpose was to keep it from any judgment. She received nothing and kept possession, the income, and her homestead exemption, so the deed was a fraudulent conveyance under § 726.01 as a matter of law. The court listed the badges: indebtedness, lack of consideration, retained possession, relationship, reserved benefit, litigation pending or threatened, secrecy, and transfer of the entire estate.

In re Kranich, 53 B.R. 821 (Bankr. M.D. Fla. 1985). Intent under § 726.01 had to exist when the transfer was made, but a conveyance whose legal effect hindered creditors was fraud in law regardless of motive. The seven badges restated from Cleveland Trust may together be conclusive. A house passed to the debtor’s corporation and days later to his children, who paid nothing; the transfers were avoided, but a mortgage failed only as to the son, whose power of attorney did not authorize mortgaging.

In re Total Acquisition Corp., 29 B.R. 836 (Bankr. S.D. Fla. 1983). Once a creditor made a prima facie showing under § 726.01, the burden shifted to the transferee, which offered no competent rebuttal. Proving actual intent was unnecessary where a conveyance’s legal effect was to defraud creditors. Four badges were proved: insolvency, lack of consideration, threatened litigation, and transfer of the entire estate. The transfer was set aside, but no money judgment was entered against the transferee.

United States v. Ressler, 433 F. Supp. 459 (S.D. Fla. 1977), aff’d, 576 F.2d 650 (5th Cir. 1978). Section 726.01 required no evil motive, only an intentional act prejudicial to creditors, and three presumptions stacked. A conveyance made free by an indebted person was presumptively fraudulent as to existing creditors; retained possession was prima facie fraud; and a close relationship tended to make a prima facie case. A donee down the chain is not a bona fide purchaser and takes the property tainted. The Fifth Circuit’s affirmance reached only the federal limitations question.

In re Harry Kaiser Associates, Inc., 14 B.R. 107 (Bankr. S.D. Fla. 1981). Under § 726.01 intent was presumed where several badges were present, and the trustee need not prove insolvency when the transfer was made. Substantially all the corporation’s assets moved free to the couple who controlled it and to their second corporation. The plane and an $8,000 cancelled credit were avoided, while the office-furnishings transfer stood because fair consideration was paid. Florida never adopted the Uniform Fraudulent Conveyance Act.

In re A.M. Operating Corp., 32 B.R. 38 (Bankr. S.D. Fla. 1983). A debtor in possession may assert § 726.01 through § 544(b) and need not prove insolvency when the transfer was made; the absence of consideration was itself prima facie evidence of a fraudulent conveyance. Where a conveyance’s result was to hinder creditors the parties’ motive was immaterial, and the motive proved here was to avoid anticipated lawsuits.

United States v. Fernon, 640 F.2d 609 (5th Cir. 1981). Florida law fixes liability for a fraudulent conveyance, but the United States is bound by neither the state limitations period nor laches; federal time limits govern. Parents liable for tax deficiencies transferred an ocean-front lot to their son, and the transfer was fraudulent under § 726.01: no consideration, a family relationship, and substantial indebtedness. The son and daughter-in-law were constructive trustees for its value. The decision binds the Eleventh Circuit.

Harper v. United States, 769 F. Supp. 362 (M.D. Fla. 1991). A creditor must have held at least one claim when the transfers were made, and the United States qualified because tax assessments relate back to the tax years involved. Applying § 726.01, the court found transferee liability where the ex-husband transferred a ranch to his ex-wife free, two months after the divorce and while he knew he was under audit; no single badge is conclusive.

In re Piche, 55 B.R. 339 (Bankr. S.D. Fla. 1985). Section 726.01, unamended since 1823, reached a transfer made intending to delay, hinder, or defraud unless made on good consideration to a person lacking notice, and encumbering property can itself be a fraudulent transfer. The debtor gave a third mortgage to a corporation his brothers and accountant controlled, reciting $250,000 of advances no note or record ever documented. The mortgage was avoided through the clerk’s certificate of title.

In re Flanzbaum, 10 B.R. 420 (Bankr. S.D. Fla. 1981). A debtor who, while substantially indebted, moved thirteen lots, his condominium, and his car into a corporation he alone owned violated § 726.01. A conveyance whose legal effect is to hinder creditors is fraud in law whatever the motive. A later buyer of the corporation’s shares took them already tainted, the corporation was the debtor’s alter ego, and the trustee recovered all its property, including replacements bought after originals were sold.

Livesay Industries, Inc. v. Livesay Window Co., 305 F.2d 934 (5th Cir. 1962). A judgment debtor was split into new corporations that took its operating assets, and an affiliate’s debts were charged off, all after liability was affirmed. That “depleted and denuded the judgment debtor” and was fraud in law under § 726.01 and § 608.55. The court ordered the stock delivered for levy and directed that the new corporations’ separate existence be disregarded if it was not. As a 1962 Fifth Circuit decision, it binds the Eleventh Circuit.

Malloy v. United States, 743 F. Supp. 834 (S.D. Fla. 1990). A husband’s quit-claim deed to his wife under a property settlement agreement, signed anticipating a divorce never completed, survived attack. The wife assumed a substantial body of joint obligations, so the transfer was supported by valuable consideration. The government showed only three badges: the marriage, a deed recorded three months late, and the husband’s help paying one assumed debt. Those facts do not, as a matter of law, permit an inference of fraudulent intent.

Miele v. United States, 637 F. Supp. 998 (S.D. Fla. 1986). A husband conveyed a lot to his fiancée under a prenuptial agreement. The promise of marriage plus her waiver of rights in his other property was valuable consideration under § 726.01. The United States could not set the deed aside; the wife took on good consideration and bona fide, lacking notice.

Sponholtz v. Sponholtz, 190 So. 2d 572 (Fla. 1966), quashing in part 180 So. 2d 497 (Fla. 3d DCA 1965). A transfer of partnership property to a corporation the partners formed to continue the same business is not itself evidence of fraud. Fraud must be proved and is never presumed, and a transfer is not fraudulent unless it hinders or delays creditors holding “just, lawful, and existing claims.” The judgment creditor here recovered his judgment after the corporation was formed.

Douglas v. Ogle, 80 Fla. 42, 85 So. 243 (Fla. 1920). A suit to cancel a satisfaction of mortgage procured from an aged and enfeebled mortgagee produced Florida’s equitable constructive-fraud definition, which is not the constructive-fraud test § 726.105(1)(b) supplies. Inadequate consideration, combined with mental weakness enough to justify the inference that advantage was taken, grounds equitable interference. Insufficient consideration paid to someone enfeebled in body and mind raises a presumption of fraud, though the party attacking the contract carries the burden of proving those facts.

Badges before the 1988 Act. A voluntary conveyance by an indebted or insolvent debtor was presumptive rather than conclusive evidence of fraud. The grantee bore the burden of showing consideration and good faith, heaviest where the grantee was the debtor’s spouse. A conduit round-trip creating a tenancy by the entireties two weeks before judgment was a fraud that raised a resulting trust in Sample v. Natalby, 120 Fla. 161, 162 So. 493 (Fla. 1935). A bankrupt’s discharge did not release his fraudulent grantees in Harkins v. Holt, 124 Fla. 774, 169 So. 481 (Fla. 1936).

Kinship did not establish fraud, but it placed the transaction under close scrutiny. Combined with other circumstances, kinship could make a prima facie case the transferee had to answer, with clear and convincing evidence required where the person charged was dead: Scott v. Dansby, 334 So. 2d 331 (Fla. 1st DCA 1976). The creditor failed that burden in Universal C.I.T. Credit Corp. v. Thursbay Chevrolet Co., 136 So. 2d 15 (Fla. 1st DCA 1961).

Fraud was never presumed, and summary judgment setting aside a warranty deed was reversed where affidavits showed a bona fide purchaser for value: McCrary v. Bobenhausen, 366 So. 2d 77 (Fla. 1st DCA 1978). Where the seller stayed in possession after an absolute sale, the buyer had to show the possession was consistent with the sale, unavoidable, temporary, or reasonably convenient. Absent that showing, a verdict sustaining the sale was contrary to the evidence: Charles Ringling Co. v. Muirheid, 101 Fla. 1215, 133 So. 108 (Fla. 1931).

Failure to record was not fraud itself but one circumstance that, combined with others, could avoid the deed. A voluntary husband-to-wife conveyance withheld from record until creditors lacking notice acquired equities was invalid against them: Baker & Holmes Co. v. Gibson, 102 Fla. 891, 136 So. 544 (Fla. 1931).

Creditor’s Bills and Remedies

Money v. Powell, 139 So. 2d 702 (Fla. 2d DCA 1962). Contingent creditors and tort claimants were as fully protected under § 726.01 as holders of absolute claims, so tort plaintiffs who had not yet sued when the debtor deeded his half interest to his wife stated a cause of action. A suit in equity removing the conveyance as an obstruction to the judgment lien was an approved alternative to a creditor’s bill or to execution.

Coleman v. Alcock, 272 F.2d 618 (5th Cir. 1959). The class § 726.01 protected was not limited to judgment creditors. A bankruptcy trustee had to prove the elements of fraud plus one actual creditor holding a provable claim within the protected class. A prior in personam creditor’s bill naming the bankrupt did not bind the trustee, who was not the bankrupt’s privy merely because the bankrupt had been a defendant.

F. A. Chastain Construction, Inc. v. Stanford, 245 So. 2d 298 (Fla. 3d DCA 1971). A bankruptcy trustee prosecuting a creditor’s bill need not prove that a judgment creditor existed. Section 726.01 still required proof that at least a contingent creditor existed when the transfer was made; the trustee failed that and failed to overturn the finding of no fraudulent intent.

Bay View Estates Corp. v. Southerland, 114 Fla. 635, 154 So. 894 (Fla. 1934), overruled in part on other grounds, B.A. Lott, Inc. v. Padgett, 14 So. 2d 667 (Fla. 1943). A voluntary conveyance by an insolvent debtor was prima facie, rebuttable evidence of fraud, and the creditor need not show actual insolvency. Two limits travel with the rule: a mortgage-secured creditor had to allege the security was inadequate when pledged, and a later assignee of a judgment was not an existing creditor. The court left open whether equity would aid a federal judgment.

First State Bank of Clermont v. Fitch, 105 Fla. 435, 141 So. 299 (Fla. 1932). A creditor need not first reduce his claim to judgment before suing in equity where a judgment would be unavailing, as against a nonresident debtor holding only an equitable interest. Property a debtor titles in his wife’s name while indebted makes a prima facie case. A fraudulent transfer may take the form of a release or cancellation of a debt.

Nissim Hadjes, Inc. v. Hasner, 408 So. 2d 819 (Fla. 3d DCA 1982). Under the pre-1988 statute, an insolvent judgment debtor that was itself a judgment creditor satisfied its own judgment below the full amount, and the recipient was party to the fraud; a claim lay to set the satisfaction aside. A fraudulent transfer may take the form of a release, a cancelled debt, or a satisfaction of judgment. A prior denial of relief “without prejudice” adjudicated nothing.

Day v. Miramar Holding Corp., 362 So. 2d 305 (Fla. 3d DCA 1978). Thirty-seven condominium units and twelve mortgages went to a Cayman corporation, well below value and just before trial. The conveyance was set aside under § 726.01 and § 56.29(6), as then numbered, as a fraud on million-dollar judgment creditors. The money judgments against the impleaded third parties were vacated, because they held none of the debtor’s assets; impleader alone implies no liability.

National Car Rental Systems, Inc. v. Bruce A. Ryals Enterprises, Inc., 380 So. 2d 529 (Fla. 5th DCA 1980). Decided before Chapter 726, the case holds that a judgment creditor may garnish the fruits of a fraudulent transfer but must prove the garnished property is the debtor’s, standing in the debtor’s shoes as to the garnishee. A third party’s repeated help defeating creditors did not subject its own bank account to garnishment where the funds were its own.

In re Coryell, 12 B.R. 245 (Bankr. S.D. Fla. 1981). A bankrupt deeded his remainder interest in his mother’s home to her, receiving nothing, while suits that became $50,000 judgments were pending. The deed was set aside under § 726.01, and the transfer dated from the day it was recorded, eleven months after signing.

Creditor’s bills before Chapter 726. A creditor’s bill had to plead that the debtor held only an equitable interest and that the conveyance obstructed enforcement: Hewitt v. Punta Gorda State Bank, 108 Fla. 39, 145 So. 883 (Fla. 1933). Equity would appoint a receiver over the conveyed property: Fleming v. Otis Elevator Co., 107 Fla. 557, 145 So. 201 (Fla. 1933). The transferees had to be joined (Martinez v. Balbin, 76 So. 2d 488 (Fla. 1954)), and prejudicial delay barred relief (Donovan v. Armour & Co., 160 Fla. 62, 33 So. 2d 601 (Fla. 1948)).

A conveyance taken in another’s name to defeat creditors could be set aside by existing and later creditors alike: Hummell v. Harrington, 92 Fla. 87, 109 So. 320 (Fla. 1926). The creditor attacking a transfer still carried the burden of proving the holder took fraudulently: Wilder v. Punta Gorda State Bank, 100 Fla. 517, 129 So. 865 (Fla. 1930). The grantee’s burden on a good-faith-purchaser defense was “no less imperative” than the creditor’s: Shedd v. Oliver, 144 Fla. 775, 198 So. 692 (Fla. 1940).

The chancellor could enter a personal money decree against a grantee who had sold, commingled, or damaged the property beyond reach. The decree was measured by the property’s value when the grantee took possession, the measure § 726.109(3) now codifies: Winn & Lovett Grocery Co. v. Saffold Brothers Produce Co., 121 Fla. 833, 164 So. 681 (Fla. 1935). A conveyance made to shield property from creditors was good between the parties, so equity would not help the grantor recover it or compel an accounting: Kahn v. Wilkins, 36 Fla. 428, 18 So. 584 (Fla. 1895).

Preferences, Consideration, and Good Faith

Miles v. Katz, 405 So. 2d 750 (Fla. 4th DCA 1981). Leading case. Under § 726.01, a preferential transfer to one creditor was not fraudulent as to the others merely because the debtor meant to defeat their claims and the preferred creditor knew it. The preferred creditor was protected even knowing the debtor was insolvent, unless he joined the debtor’s fraudulent purpose or the property was worth materially more than the debt. A security interest the corporation gave its lawyer, covering $16,000 of past fees, three days after a wage suit was served, stood.

Nelson v. Cravero Constructors, Inc., 117 So. 2d 764 (Fla. 3d DCA 1960). Proof that an insolvent debtor paid an antecedent debt by transferring assets was not itself proof of fraud. The only restraint on the creditor was good faith, and the conveyance was void only if he took it to aid the debtor’s fraud. Property worth $40,000 to $50,000 taken against a $5,000 claim plus assumed obligations exceeding $40,000 was adequate consideration.

Jackson v. Citizens Bank & Trust Co., 53 Fla. 265, 44 So. 516 (Fla. 1907). A purchase by one who was not a creditor was void as against creditors even though full consideration was paid, if the seller sold to defraud his creditors and the buyer failed to inquire. The test was whether the buyer knew facts that would have led an ordinarily prudent person to inquire, and whether that inquiry would have uncovered the fraudulent purpose. The inquiry-notice test survived the 1988 act and is the root of the modern preference rule.

Lamper v. Osius, 38 F. Supp. 373 (S.D. Fla. 1941). Corporate stock and patents transferred to pay a valid pre-existing debt, about $19,484, were fair and adequate consideration under the old statute. The trustee’s suit was also barred by the three-year discovery limitation then in force and by laches, because a diligent creditor should have known the facts.

Consideration and preferences before Chapter 726. Whether a transfer stood turned on whether consideration actually reached the debtor. A voluntary conveyance by someone already indebted was presumptively fraudulent as to existing creditors. A conveyance supported by marriage, alimony waived, or an antecedent debt was not voluntary, and the creditor then had to prove actual intent.

A deed reciting “$10.00 and other valuable considerations” was evidence of voluntariness, but where the husband was not shown insolvent and both spouses denied it, voluntariness could not be presumed: Weathersbee v. Dekle, 107 Fla. 517, 145 So. 198 (Fla. 1933). A deed made in contemplation of divorce, supported by the wife’s alimony waiver, was not fraudulent per se: Trueman Fertilizer Co. v. Stephan, 111 Fla. 207, 149 So. 349 (Fla. 1933).

Marriage under an antenuptial settlement was consideration (Dova v. Hancock, 88 Fla. 503, 102 So. 646 (Fla. 1924)), as was a husband’s pre-existing debt (Ocklawaha River Farms Co. v. Young, 73 Fla. 159 (Fla. 1917)). Consideration that never reached the grantor corporation left the deed void: Florida Fruit Canners v. Walker, 90 F.2d 753 (5th Cir. 1937). A constructively but not actually fraudulent conveyance stood to the extent of the consideration actually given; the grantee held the residue as trustee for creditors: Barrow v. Bailey, 5 Fla. 9 (Fla. 1853).

An inadequate price was a mark of fraud but did not establish it. A creditor who took an insolvent debtor’s property on an antecedent debt stood better than a purchaser for present consideration. He still had to act in good faith, and he could not take property worth materially more than the debt: Vickers v. Glenn, 102 Fla. 535, 136 So. 326 (Fla. 1931).

A creditor’s bill failed where it alleged only that the conveyances were “a fraud” and preferred one creditor. The bill had to allege that the preferred creditor joined the debtor’s fraudulent purpose, had a purpose beyond securing his own debt, or took property worth materially more than the debt: Godard v. Crenshaw, 136 Fla. 78, 186 So. 822 (Fla. 1938).

Fraudulent Transfers in Bankruptcy

A bankruptcy trustee can reach past Florida’s four-year deadline. The IRS’s ten-year period is available where the IRS holds a claim against the transferor, and a transfer into a self-settled trust made with actual intent is avoidable ten years back.

Mukamal v. Citibank N.A. (In re Kipnis), 555 B.R. 877 (Bankr. S.D. Fla. 2016). A Chapter 7 trustee may step into the IRS’s shoes under § 544(b) and use its ten-year collection period under 26 U.S.C. § 6502, reaching transfers Florida’s four-year deadline would protect. The court treated § 726.110 as an ordinary statute of limitations that does not bind the IRS. The 2005 transfers were challenged more than ten years later.

In re International Administrative Services, Inc., 408 F.3d 689 (11th Cir. 2005). Where pervasive fraud, assets moved more than a hundred times among twenty-three entities, prevented the trustee from reasonably discovering the transfers, § 726.110(1)’s second clause let him avoid transfers older than four years in a § 544(b) action. Section 550(a) does not require recovering from the initial transferee first or separately avoiding every prior transfer, tracing does not require dollar-for-dollar accounting, and § 546(a) is a true statute of limitations subject to equitable tolling.

In re Kaufman & Roberts, Inc., 188 B.R. 309 (Bankr. S.D. Fla. 1995). A § 544(b) action is not time-barred so long as, on the petition date, some unsecured creditor still held a fraudulent-transfer claim that was not itself time-barred, as one creditor did whose own state-court action was pending when the debtor filed. Whether the remaining creditors should have known of the concealed transfers was a fact question for trial.

In re Naturally Beautiful Nails, Inc., 243 B.R. 827 (Bankr. M.D. Fla. 1999). Where a fraudulent-transfer claim is brought under § 544(b) and Chapter 726, § 546(a)’s two-year deadline governs the proceeding rather than Chapter 726’s four-year period, so a debtor-in-possession who sued nearly four years after the petition was time-barred. Equitable tolling of § 546(a) requires knowledge acquirable through reasonable diligence, which the debtor did not establish.

In re Pharmacy Distributor Services, Inc., 455 B.R. 817 (Bankr. S.D. Fla. 2011). Section 106’s waiver of the United States’ sovereign immunity for § 544 avoidance actions carries to the Chapter 726 theory a § 544(b) claim rests on, and no separate waiver is required. Section 546(a) extends the trustee’s time so long as the four-year period had not run at the petition date; a transfer in October 2006, a petition in November 2008, and a complaint in March 2011 were timely.

In re Florida West Gateway, Inc., 182 B.R. 595 (Bankr. S.D. Fla. 1995). Only a “creditor” has standing under Chapter 726, so a Chapter 11 debtor’s standing comes from 11 U.S.C. § 544(a), which makes it a hypothetical judgment lien creditor at the petition date. Because the claim is grounded in § 544, § 546’s two-year period governs, provided the state period had not already run; the four-year claims were timely, but the one-year insider-preference claim had expired and could not be revived by the filing.

In re J & D Sciences, Inc., 335 B.R. 791 (Bankr. M.D. Fla. 2006). A trustee’s bankruptcy avoidance deadline is equitably tolled where the debtor concealed the transfer on its statement of financial affairs. The trustee may rely on the sworn schedules, need not search the patent office, and is not charged with a creditor’s own knowledge. A patent assignment is transferred, for avoidance purposes, on the date it is recorded with the USPTO.

In re Pearlman, 515 B.R. 887 (Bankr. M.D. Fla. 2014). A company run as a Ponzi scheme is insolvent as a matter of law, supplying the insolvency element of constructive fraud, and payments it made on its principal’s personal mortgage were avoided. The lender still owed nothing, because the proceeds of the property’s later sale had already returned to the estate and the single-satisfaction rule of 11 U.S.C. § 550(d) bars recovering both the repayment and a judgment.

Chapter 726 and the federal avoidance sections. Florida’s constructive-fraud provisions, §§ 726.105(1)(b) and 726.106(1), are analogous in form and substance to 11 U.S.C. § 548(a)(1)(B) and are analyzed alongside it. The difference is that the Florida sections are not confined to the period before the petition. Both points are stated in In re Toy King Distributors, 256 B.R. 1 (Bankr. M.D. Fla. 2000), and In re Venice-Oxford Associates, 236 B.R. 820, 834 (Bankr. M.D. Fla. 1999).

In bankruptcy, 11 U.S.C. § 548(a)(1) reaches transfers made within two years before the petition. Section 548(e)(1) reaches transfers into a self-settled trust or similar device during the ten years preceding the petition, but only where the debtor is a beneficiary and the transfer was made with actual intent to hinder, delay, or defraud.

Husky International Electronics, Inc. v. Ritz, 578 U.S. 355 (2016). Leading case. “Actual fraud” in 11 U.S.C. § 523(a)(2)(A) encompasses fraudulent-conveyance schemes, so no misrepresentation from the debtor to the creditor is required, because a fraudulent conveyance is not an inducement-based fraud; the Court reversed the Fifth Circuit and resolved a circuit split. A debtor who moves assets to defeat a creditor and later files bankruptcy may find the debt survives the discharge.

Dillworth v. Mahecha Diaz (In re Bal Harbour Quarzo, LLC), 634 B.R. 827 (Bankr. S.D. Fla. 2021). A trustee reaching back past four years under § 544(b) must name an unsecured creditor that could itself have avoided the transfer on the petition date, and must plead that this creditor discovered it, or could have, within the savings year. The trustee’s own appointment as receiver, his investigation, and general allegations that the debtor concealed the transfers did not supply that. Conclusory alter-ego allegations failed as well.

Chapter 726 reaches a transfer whether the creditor’s claim arose before or after it, so a transfer made before any claim exists avoids the pending-suit badge of fraud but not the statute. Receiving reasonably equivalent value defeats a constructive-fraud claim and supports the good-faith defense under § 726.109.