PARENTS ALLEGEDLY TRANSFERRED THEIR PROPERTY INTERESTS TO SONS, TO AVOID PAYING CREDITOR
For about twelve years, S.P. and F.C. (parents) together with their sons, Y.Z.P. and Y.X.P., owned a “Smart Street” property as tenants with rights of survivorship. But a week after the plaintiff filed its lawsuit seeking $5 million in damages against them, the parents allegedly transferred their interests in the property to their kids.
Finding that the transfer was a “fraudulent conveyance,” and violative of the state’s Debtor and Creditor Law, the New York County Supreme Court granted summary judgment in the plaintiff’s favor and enjoined the sale or other disposition of the property.
On appeal, the Appellate Division, First Department, noted that there was no evidence in the record that the parents’ transfer of their interests was for “fair consideration.” While there was a reference to one of the sons having paid the mortgage, the lack of any proper writing operated to their detriment, as did the transaction’s “intrafamilial” nature and timing. (Interesting, the plaintiff was not required to show that the family was aware of its claims when the conveyance occurred.)
Given those underpinnings, the AD1 thought that the court below had “providently exercised its discretion” when it issued injunctive relief in the plaintiff’s favor.
We convey our condolences to all concerned …. (And that’s with absolutely no consideration, either.)
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DECISION