(a)As used in this section, the following terms have the following meanings:
(1)“Insolvent” means:
(A)With reference to a person other than a partnership, a financial condition such that the sum of the person’s debts is greater than all of the
person’s property, at a fair valuation, exclusive of both of the following:
(i)Property transferred, concealed, or removed with intent to hinder, delay, or defraud the person’s creditors.
(ii)Property that is exempt from property of the estate pursuant to the election of the person made pursuant to Section 1801.
(B)With reference to a partnership, financial condition such that the sum of the partnership’s debts are greater than the aggregate of, at a fair valuation, both of the following:
(i)All of the partnership’s property, exclusive of pr
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(a)
As used in this section, the following terms have the following meanings:
(1)
“Insolvent” means:
(A)
With reference to a person other than a partnership, a financial condition such that the sum of the person’s debts is greater than all of the
person’s property, at a fair valuation, exclusive of both of the following:
(i)
Property transferred, concealed, or removed with intent to hinder, delay, or defraud the person’s creditors.
(ii)
Property that is exempt from property of the estate pursuant to the election of the person made pursuant to Section 1801.
(B)
With reference to a partnership, financial condition such that the sum of the partnership’s debts are greater than the aggregate of, at a fair valuation, both of the following:
(i)
All of the partnership’s property, exclusive of property of the kind specified in clause (i) of subparagraph (A).
(ii)
The sum of the excess of the value of each general partner’s separate
property, exclusive of property of the kind specified in clause (ii) of subparagraph (A), over the partner’s separate debts.
(2)
“Inventory” means personal property leased or furnished, held for sale or lease, or to be furnished under a contract for service, raw materials, work in process, or materials used or consumed in a business, including farm products such as crops or livestock, held for sale or lease.
(3)
“Insider” means:
(A)
If the assignor is an individual, any of the following:
(i)
A relative of the assignor or of a general partner of the assignor.
(ii)
A partnership in which the assignor is a general partner.
(iii)
A general partner of the assignor.
(iv)
A corporation of which the assignor is a director, officer, or person in control.
(B)
If the assignor is a corporation, any of the following:
(i)
A director of the assignor.
(ii)
An officer of the assignor.
(iii)
A person in control of the assignor.
(iv)
A partnership in which the assignor is a general partner.
(v)
A general partner of the assignor.
(vi)
A relative of a general partner, director, officer, or person in control of the
assignor.
(C)
If the assignor is a partnership, any of the following:
(i)
A general partner in the assignor.
(ii)
A relative of a general partner in, general partner of, or person in control of the assignor.
(iii)
A partnership in which the assignor is a general partner.
(iv)
A general partner of the assignor.
(v)
A person in control of the assignor.
(D)
An affiliate of the assignor or an insider of an affiliate as if the affiliate were the assignor.
(E)
A managing agent of the assignor.
As used in this paragraph, the following terms have the following meanings:
“Relative” means an individual related by affinity or consanguinity within the third degree as determined by the common law, or an individual in a step or adoptive relationship within the third degree.
An “affiliate” means a person that directly or indirectly owns, controls, or holds, with power to vote, 20 percent or more of the outstanding voting securities of the assignor, or 20 percent or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote by the assignor, excluding securities held in a fiduciary or agency capacity without sole discretionary power to vote, or held solely to secure a debt if the holder has not in fact exercised the power to vote, or a person who operates the business of the assignor under a lease or operating agreement or
whose business is operated by the assignor under a lease or operating agreement.
(4)
“Judicial lien” means a lien obtained by judgment, levy, sequestration, or other legal or equitable process or proceeding.
(5)
“New value” means money or money’s worth in goods, services, or new credit, or release by a transferee of property previously transferred to the transferee in a transaction that is neither void nor voidable by the assignor or the assignee under any applicable law, but does not include an obligation substituted for an existing obligation.
(6)
“Receivable” means a right to payment, whether or not the right has been earned by performance.
(7)
“Security agreement” means an agreement that creates or provides for a security interest.
(8)
“Security interest” means a lien created by an agreement.
(9)
“Statutory lien” means a lien arising solely by force of a statute on specified circumstances or conditions, or lien of distress for rent, whether or not statutory, but does not include a security interest or judicial lien, whether or not the interest or lien is provided by or is dependent on a statute and whether or not the interest or lien is made fully effective by statute.
(10)
“Transfer” means every mode, direct or indirect, absolute or conditional, voluntary or involuntary, or disposing of or parting with property or with an interest in property, including retention of title as a security interest.
(b)
Except as provided in subdivision (c), the assignee of any general assignment for
the benefit of creditors, as defined in Section 493.010, may recover any transfer of property of the assignor that is all of the following:
(1)
To or for the benefit of a creditor.
(2)
For or on account of an antecedent debt owed by the assignor before the transfer was made.
(3)
Made while the assignor was insolvent.
(4)
Made on or within 90 days before the date of the making of the assignment or made between 90 days and one year before the date of making the assignment if the creditor, at the time of the transfer, was an insider and had reasonable cause to believe the debtor was insolvent at the time of the transfer.
(5)
Enables the creditor to receive more than another creditor of the
same class.
(c)
The assignee may not recover under this section a transfer as follows:
(1)
To the extent that the transfer was both of the following:
(A)
Intended by the assignor and the creditor to or for whose benefit the transfer was made to be a contemporaneous exchange for new value given to the assignor.
(B)
In fact a substantially contemporaneous exchange.
(2)
To the extent that the transfer was all of the following:
(A)
In payment of a debt incurred in the ordinary course of business or financial affairs of the assignor and the transferee.
(B)
Made in
the ordinary course of business or financial affairs of the assignor and the transferee.
(C)
Made according to ordinary business terms.
(3)
Of a security interest in property acquired by the assignor that meets both of the following:
(A)
To the extent the security interest secures new value that was all of the following:
(i)
Given at or after the signing of a security agreement that contains a description of the property as collateral.
(ii)
Given by or on behalf of the secured party under the agreement.
(iii)
Given to enable the assignor to acquire the property.
(iv)
In fact used by the assignor to acquire the property.
(B)
That is perfected within 20 days after the security interest attaches.
(4)
To or for the benefit of a creditor, to the extent that, after the transfer, the creditor gave new value to or for the benefit of the assignor that meets both of the following:
(A)
Not secured by an otherwise unavoidable security interest.
(B)
On account of which new value the assignor did not make an otherwise unavoidable transfer to or for the benefit of the creditor.
(5)
Of a perfected security interest in inventory or a receivable or the proceeds of either, except to the extent that the aggregate of all the transfers to the transferee
caused a reduction, as of the date of the making of the assignment and to the prejudice of other creditors holding unsecured claims, of any amount by which the debt secured by the security interest exceeded the value of all security interest for the debt on the later of the following:
(A)
Ninety days before the date of the making of the assignment.
(B)
The date on which new value was first given under the security agreement creating the security interest.
(6)
That is the fixing of a statutory lien.
(7)
That is payment to a claimant, as defined in Section 8004 of the Civil Code, in exchange for the claimant’s waiver or release of any potential or asserted claim of lien, stop payment notice, or right to recover on a payment bond, or any combination
thereof.
(8)
To the extent that the transfer was a bona fide payment of a debt to a spouse, former spouse, or child of the debtor, for alimony to, maintenance for, or support of, the spouse or child, in connection with a separation agreement, divorce decree, or other order of a court of record, or a determination made in accordance with state or territorial law by a governmental unit, or property settlement agreement; but not to the extent that either of the following occurs:
(A)
The debt is assigned to another entity voluntarily, by operation of law or otherwise, in which case the assignee may not recover that portion of the transfer that is assigned to the state or any political subdivision of the state pursuant to Part D of Title IV of the Social Security Act (42 U.S.C. Sec. 601 et seq.) and passed on to the spouse, former spouse, or child of the debtor.
(B)
The debt includes a liability designated as alimony, maintenance, or support, unless the liability is actually in the nature of alimony, maintenance, or support.
(d)
An assignee of any general assignment for the benefit of creditors, as defined in Section 493.010, may avoid a transfer of property of the assignor transferred to secure reimbursement of a surety that furnished a bond or other obligation to dissolve a judicial lien that would have been avoidable by the assignee under subdivision (b). The liability of the surety under the bond or obligation shall be discharged to the extent of the value of the property recovered by the assignee or the amount paid to the assignee.
(e)
(1)
For the purposes of this section:
(A)
A transfer
of real property other than fixtures, but including the interest of a seller or purchaser under a contract for the sale of real property, is perfected when a bona fide purchaser of the property from the debtor, against whom applicable law permits the transfer to be perfected, cannot acquire an interest that is superior to the interest of the transferee.
(B)
A transfer of a fixture or property other than real property is perfected when a creditor on a simple contract cannot acquire a judicial lien that is superior to the interest of the transferee.
(2)
For the purposes of this section, except as provided in paragraph (3), a transfer is made at any of the following times:
(A)
At the time the transfer takes effect between the transferor and the transferee, if the transfer is perfected at, or within 10 days after, the
time, except as provided in subparagraph (B) of paragraph (3) of subdivision (c).
(B)
At the time the transfer is perfected, if the transfer is perfected after the 10 days.
(C)
Immediately before the date of making the assignment if the transfer is not perfected at the later of:
(i)
The making of the assignment.
(ii)
Ten days after the transfer takes effect between the transferor and the transferee.
(3)
For the purposes of this section, a transfer is not made until the assignor has acquired rights in the property transferred.
(f)
For the purposes of this section, the assignor is presumed to have been insolvent on and during
the 90 days immediately preceding the date of making the assignment.
(g)
An action by an assignee under this section must be commenced within one year after making the assignment.