§ 277 — Defenses, liability, and protection of transferee or obligee

§ 277. Defenses, liability, and protection of transferee or obligee.\n(a) A transfer or obligation is not voidable under paragraph one of\nsubdivision (a) of section two hundred seventy-three of this article\nagainst a person that took in good faith and for a reasonably equivalent\nvalue given the debtor or against any subsequent transferee or obligee.\n (b) To the extent a transfer is avoidable in an action by a creditor\nunder paragraph one of subdivision (a) of section two hundred\nseventy-six of this article the following rules apply:\n (1) Except as otherwise provided in this section, the creditor may\nrecover judgment for the value of the asset transferred, as adjusted\nunder subdivision (c) of this section, or the amount necessary to\nsatisfy the creditor's claim, whichever is less. The judgment may be\nentered against:\n (i) the first transferee of the asset or the person for whose benefit\nthe transfer was made; or\n (ii) an immediate or mediate transferee of the first transferee, other\nthan:\n (A) a good-faith transferee that took for value; or\n (B) an immediate or mediate good-faith transferee of a person\ndescribed in clause (A) of this subparagraph.\n (2) Recovery pursuant to paragraph one of subdivision (a) or\nsubdivision (b) of section two hundred seventy-six of this article of or\nfrom the asset transferred or its proceeds, by levy or otherwise, is\navailable only against a person described in subparagraph (i) or (ii) of\nparagraph one of this subdivision.\n (c) If the judgment under subdivision (b) of this section is based\nupon the value of the asset transferred, the judgment must be for an\namount equal to the value of the asset at the time of the transfer,\nsubject to adjustment as the equities may require.\n (d) Notwithstanding voidability of a transfer or an obligation under\nthis article, a good-faith transferee or obligee is entitled, to the\nextent of the value given the debtor for the transfer or obligation, to:\n (1) a lien on or a right to retain an interest in the asset\ntransferred;\n (2) enforcement of an obligation incurred; or\n (3) a reduction in the amount of the liability on the judgment.\n (e) A transfer is not voidable under paragraph two of subdivision (a)\nof section two hundred seventy-three or section two hundred seventy-four\nof this article if the transfer results from:\n (1) termination of a lease upon default by the debtor when the\ntermination is pursuant to the lease and applicable law; or\n (2) enforcement of a security interest in compliance with article nine\nof the uniform commercial code, other than acceptance of collateral in\nfull or partial satisfaction of the obligation it secures.\n (f) A transfer is not voidable under subdivision (b) of section two\nhundred seventy-four of this article:\n (1) to the extent the insider gave new value to or for the benefit of\nthe debtor after the transfer was made, except to the extent the new\nvalue was secured by a valid lien;\n (2) if made in the ordinary course of business or financial affairs of\nthe debtor and the insider; or\n (3) if made pursuant to a good-faith effort to rehabilitate the debtor\nand the transfer secured present value given for that purpose as well as\nan antecedent debt of the debtor.\n (g) The following rules determine the burden of proving matters\nreferred to in this section:\n (1) A party that seeks to invoke subdivision (a), (d), (e) or (f) of\nthis section has the burden of proving the applicability of that\nsubdivision.\n (2) Except as otherwise provided in paragraphs three and four of this\nsubdivision, the creditor has the burden of proving each applicable\nelement of subdivision (b) or (c) of this section.\n (3) The transferee has the burden of proving the applicability to the\ntransferee of clause (A) or (B) of subparagraph (ii) of paragraph one of\nsubdivision (b) of this section.\n (4) A party that seeks adjustment under subdivision (c) of this\nsection has the burden of proving the adjustment.\n (h) The standard of proof required to establish matters referred to in\nthis section is preponderance of the evidence.\n