§ 60B.31 — Fraudulent Transfers After Petition
Plain-Language Summary
Transfers of an insurer's property made after a rehabilitation or liquidation petition is filed can be valid if the buyer acted in good faith and paid fair value. Someone who knows about the pending proceeding is not considered to be acting in good faith. The person claiming the transfer is valid has the burden of proof.
60B.31 FRAUDULENT TRANSFERS AFTER PETITION.
§
Subdivision 1.Effect of petition; real property.
After a petition for rehabilitation or liquidation, a transfer of any of the real property of the insurer made to a person acting in good faith shall be valid against the receiver if made for a present fair equivalent value or, if not made for a present fair equivalent value, then to the extent of the present consideration actually paid therefor, for which amount the transferee shall have a lien on the property so transferred. The recording of a copy of the petition for or order of rehabilitation or liquidation with the county recorder in the county where any real property in question is located is constructive notice of the commencement of a proceeding in rehabilitation or liquidation. The exercise by a court of the United States or any state of jurisdiction to authorize or effect a judicial sale of real property of the insurer within any county in any state shall not be impaired by the pendency of such a proceeding unless the copy is recorded in the county prior to the consummation of the judicial sale. §
Subd. 2.Effect of petition; personal property.
After a petition for rehabilitation or liquidation and before either the receiver takes possession of the property of the insurer or an order of rehabilitation or liquidation is granted:
(a) A transfer of any of the property of the insurer, other than real property, made to a person acting in good faith shall be valid against the receiver if made for a present fair equivalent value or, if not made for a present fair equivalent value, then to the extent of the present consideration actually paid therefor, for which amount the transferee shall have a lien on the property so transferred.
(b) A person indebted to the insurer or holding property of the insurer may, if acting in good faith, pay the indebtedness or deliver the property or any part thereof to the insurer or upon the insurer’s order, with the same effect as if the petition were not pending.
(c) A person having actual knowledge of the pending rehabilitation or liquidation shall be deemed not to act in good faith unless that person has reasonable cause to believe that the petition is not well founded.
(d) A person asserting the validity of a transfer under this section shall have the burden of proof. Except as elsewhere provided in this section, no transfer by or in behalf of the insurer after the date of the petition for liquidation by any person other than the liquidator shall be valid against the liquidator. §
Subd. 3.Negotiability.
Nothing in sections 60B.01 to 60B.61 shall impair the negotiability of currency or negotiable instruments.
History:
1969 c 708 s 31; 1976 c 181 s 2; 1986 c 444
History: History: 1969 c 708 s 31; 1976 c 181 s 2; 1986 c 444