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exception is very limited and relies on the continuity of the corporate identity, and not on thecontinuation of the business or its operations. 234. FraudThe fraud exception arises from the judicial doctrine that transactions entered into to escapeliability should not be permitted. This exception covers the “easy” cases, such as where theconsideration for the assets was fictitious or inadequate, or where there is demonstrable intent todefraud creditors; but it has also been applied in the more difficult situations where the transfer ofassets, while perfectly legitimate, is done (at least in part) to avoid liability. In some cases, there wasa question of whether disclosure to the plaintiff overcame the seller’s objective of avoidingliability, 24 while another early case held that nothing short of actual fraud will vitiate a sale ofcorporate assets. 25In addition to the case law, this area is governed by the Uniform Fraudulent Transfer Act(“UFTA”), which has been enacted in most jurisdictions. The purpose of UFTA is to limit a debtor’sability to transfer assets if doing so puts them out of reach of its creditors at a time when the debtor’sfinancial condition is, or would be, precarious. The UFTA provides that a “transfer” is voidable by acreditor if (i) the transfer is made with actual intent to hinder, delay or defraud a creditor 26 or (ii) thetransfer leaves the debtor insolvent or undercapitalized, and it is not made in exchange forreasonably equivalent value. 27 If a transaction is determined by a court to constitute a fraudulenttransfer under UFTA, the court can order any appropriate equitable relief, such as voiding orenjoining the transfer in whole or to the extent necessary to satisfy creditors’ claims, attaching thetransferred assets or appointing a receiver to take control of the transferred assets.5. Continuity of Enterprise (a/k/a Substantial Continuation)The continuity of enterprise exception (which is also known as the “substantial continuation”doctrine) was established by the Michigan Supreme Court in 1976 in Turner v. Bituminous CasualtyCo. 28 This exception is essentially an expansion of the mere continuation doctrine, except that thefocus of the inquiry is the continuity of the business operations, and not the corporate structure. Theexception consists of an eight-part standard:1. retention of the same employees;2. retention of the same supervisory personnel;3. retention of the same product facilities in the same locations;4. production of the same product;232425262728Savini v. Kent Machine Works, Inc., supra, note 21, citing Travis v. Harris Corp., supra, note 22.Raytech Corp. v. White, 54 F.3d 187 (3d Cir. 1995).Davis v. Hemming, 101 Conn. 713, 127 A. 514 (1918).Since intent to hinder, delay or defraud is usually inferred, a set of factors has been developed toassist in making the determination. Max Sugarman Funeral Home, Inc. v. A.D.B. Investors, 926F.2d 1248, 1254 (1 st Cir. 1991).In re WCC Holding Corp., 171 B.R. 972, 986 (Bankr.N.D. Tex 1994).244 N.W.2d 873 (Mich. 1976).Appendix C – Page 52525936v1