Saturday, April 12, 2008
Nebraska Supreme Court affirms dismissal of wife's fraudulent transfer complaint against ex-husband to reach business he liquidated to avoid including its assets in the couple's marital estate. Reed v. Reed, S-06-757, 275 Neb. 418. Shortly before the husband filed for divorce his parents repossessed stock they held in the couple's business; the husband also liquidated his interest in a real estate development partnership. Wife sued to reclaim her marital share of these interests using the Uniform Fraudulent Transfer Act (UFTA) Neb. R ev. S tat. §§ 36-701 to 36-712 (Reissue 2004). The Hall County District Court dismissed her complaint, the Supreme Court affirms. "a spouse’s right to an equitable distribution of the marital estate is not a “right to payment” under the UFTA . A ccordingly, the UFTA does not apply in cases where, as here, an individual believes that his or her former spouse fraudulently transferred assets before the divorce to prevent those assets from being equitably distributed as part of the marital estate. Instead, such a claim is perhaps more properly litigated as a claim for dissipation of marital assets."