Following assets beyond the original debtor
A business may continue operating while its equipment, customer payments or revenue appear under a different name. A relative may claim ownership of property previously held by the debtor. A substantial payment may leave an account shortly before collection begins.
Those circumstances call for investigation. MJB Law examines what moved, who received it, what was exchanged and how the transaction affected the creditor's ability to recover.
When can a transfer be challenged?
Minnesota's Uniform Voidable Transactions Act provides several grounds for challenging transfers. Under Minnesota Statutes section 513.44, one ground involves a debtor's actual intent to obstruct or delay creditors or defeat their claims.
Other claims focus on whether the debtor received reasonably equivalent value and whether the required financial conditions existed. For example, section 513.45 addresses certain transfers made without reasonably equivalent value when the debtor was insolvent or became insolvent as a result.
A transaction with a relative or related company is not automatically voidable. The analysis must account for the statutory requirements, the property transferred, existing liens and applicable recipient defenses.
Transactions and records that may matter
MJB Law evaluates disputes involving:
- Transfers of equipment, real estate, money or other business assets.
- Payments or distributions to owners, relatives and related entities.
- Business revenue redirected to another person or company.
- Claimed sales or transfers unsupported by the transaction records.
- Transactions occurring during litigation or collection efforts.
- Continued use or control of property after an alleged transfer.
Bank records, accounting entries, invoices, ownership documents and testimony can reveal how the transaction actually worked. The investigation also examines the debtor's financial condition, the value exchanged and the timing of the creditor's claim.
Documented fraudulent-transfer litigation
Bremer Bank v. Weis
Matthew represented Bremer Bank in litigation involving diverted dairy revenue and disputed cattle ownership. In an August 4, 2020 order, the Dodge County District Court granted summary judgment on contested fraudulent-transfer issues and awarded $499,309.36 against Bryant Weis in connection with diverted milk proceeds.
Read the Bremer Bank case summary
Read the August 4, 2020 district court order (PDF)
Glenwood State Bank litigation
Matthew represented Glenwood State Bank with Jack Atnip III in litigation tracing equipment and business activity through related earthmoving businesses. The representation produced a trial victory on fraudulent-transfer, successor-liability and civil-conspiracy claims. The challenged judgments were affirmed in an unpublished 2016 appellate opinion.
Read the Glenwood State Bank case summary
Read the 2016 Court of Appeals opinion (unpublished)
Do you need a judgment before challenging a transfer?
Not necessarily. The Act's definition of a claim includes rights to payment that have not been reduced to judgment. The creditor must still establish a qualifying claim and the requirements for challenging the transfer. Timing matters, particularly if further transfers are threatened.
Matching the remedy to the evidence
Potential relief may include setting aside a transfer to the extent necessary to satisfy a claim, obtaining a judgment against an appropriate recipient, or seeking provisional relief such as an injunction or receivership. Each remedy has legal requirements and limitations.
The assessment also considers recipient defenses, other creditors' rights, available assets and any bankruptcy proceeding. MJB Law evaluates those issues alongside the underlying claim so that the litigation strategy addresses both liability and the practical prospect of recovery.
Disputes about deceptive statements made in a transaction may also involve business fraud and misrepresentation. Claims against a successor business or owner require a separate analysis of successor liability and piercing the corporate veil.
Discuss a transfer or asset-recovery concern
Identify the parties, the debt or claim, the suspected transfer and any approaching deadline. After a conflict check, the firm can arrange an appropriate way to review the supporting records.
Contact Matthew Bialick
952-239-3095
View Matthew's profile
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