FRAUDULENT CONVEYANCES Nassau Academy of Law CLE Live ...

Page 24 A.D.3d 495, 773 N.Y.S.2d 71, 2004 N.Y. Slip Op. 01149(Cite as: 4 A.D.3d 495, 773 N.Y.S.2d 71)business operated out of same address as former husband'sother business concerns. McKinney's Debtorand Creditor Law §§ 273-a, 276.[3] Fraudulent Conveyances 186 14186 Fraudulent Conveyances186I Transfers and Transactions Invalid186I(A) Grounds of Invalidity in General186k13 Badges of Fraud186k14 k. In General. Most Cited CasesIn action for fraudulent conveyance, direct evidenceof fraudulent intent is often elusive, and therefore,courts will consider “badges of fraud,” which arecircumstances that accompany fraudulent transfers socommonly that their presence gives rise to an inferenceof intent. McKinney's Debtor and Creditor Law§ 276.[4] Fraudulent Conveyances 186 14186 Fraudulent Conveyances186I Transfers and Transactions Invalid186I(A) Grounds of Invalidity in General186k13 Badges of Fraud186k14 k. In General. Most Cited CasesBadges of fraud, which may be considered as evidencein a fraudulent conveyance action, include (1)the close relationship among the parties to the transaction,(2) the inadequacy of the consideration, (3)the transferor's knowledge of the creditor's claims, orclaims so likely to arise as to be certain, and thetransferor's inability to pay them, and (4) the retentionof control of property by the transferor after theconveyance. McKinney's Debtor and Creditor Law §276.[5] Divorce 134 255134 Divorce134V Alimony, Allowances, and Disposition ofProperty134k255 k. Conclusiveness of Adjudication.Most Cited CasesRelitigation of issue of whether promissory notesissued by husband's businesses constituted fair considerationto support former husband's confession ofjudgment in favor of businesses was not barred, informer wife's fraudulent conveyance action againstbusinesses to recover equitable distribution awardbased upon valuation of businesses, under doctrinesof either res judicata or collateral estoppel, by priormatrimonial action, where promissory notes wereexamined in that action in context of valuation trialfor purpose of equitable distribution.**73 Dollinger Gonski & Grossman, Carle Place,N.Y. (Matthew Dollinger, Floyd G. Grossman, andMindy Wallach of counsel), for appellants.Nixon Peabody, LLP, New York, N.Y. (Frank H.Penski and Michael E. Kraver of counsel), for respondent.NANCY E. SMITH, J.P., DANIEL F. LUCIANO,HOWARD MILLER, and SANDRA L. TOWNES,JJ.*496 In an action, inter alia, to recover damages forfraudulent conveyance of real property, the defendantsIsland Helicopter Leasing Corp. and Rio Manufacturingof Delaware, Inc., appeal from an order ofthe Supreme Court, Nassau County (Skelos, J.), enteredAugust 15, 2002, which granted the plaintiff'smotion for summary judgment on the first, third, andsixth causes of action.ORDERED that the order is affirmed, with costs.The plaintiff, Madeline Dempster, was divorcedfrom the defendant George Dempster (hereinafterthe defendant) by judgment dated May 22, 1992. Onappeal, the judgment of divorce was modified and thematter was remitted to the trial court for valuation ofcertain of the defendant's closely-held businesses forpurposes of equitable distribution. As a result of thevaluation trial, the plaintiff was awarded additionalamounts based on the value of the defendant's businesses,which were included in an amended judgmentof divorce. Thereafter, the plaintiff sought to enforcethe amended judgment of divorce, resulting in twojudgments in her favor in the sums of $3,194,484 and$283,383.57, respectively.The transactions which give rise to the present lawsuitoccurred in the summer of 1995. On June 29,1995, just weeks before the valuation trial, the defendanttransferred title of his residence to the defendantOverview Equities, Inc. (hereinafter Overview).Two days earlier, on June 27, 1995, Overview wascreated by the filing of a Certificate of Incorporationwith the Secretary of the State of Delaware. Thereaf-© 2009 Thomson Reuters. No Claim to Orig. US Gov. Works.