Fraudulent Transfers

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Avoidence of fraudulent transfers differs from avoidance of preferences. Preferences represent legitimate payments honestly owed; a fraudulent transfer generally is viewed as one that skews the division of property among creditors and wrongfully depletes the estate—although such is not always the case. While preference avoidance aims to ensure that all unsecured creditors are treated equally, the avoidance of fraudulent transfer focuses on the relationship between the debtor and the creditor.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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