Chapter 242

242.05   Transfer or obligation voidable as to present creditor.

242.06   When transfer is made or obligation is incurred.

242.07   Remedies of creditors.

242.08   Defenses, liability, and protection of transferee or obligee.

242.09   Statute of limitation.

242.094   Governing law.

242.096   Application to series organization.

242.10   Supplementary provisions.

242.11   Uniformity of application and construction.

242.12   Relation to electronic signatures in global and national commerce act.

242.13   Short title.

242.01 242.01 Definitions. In this chapter:

242.01(1) (1) “Affiliate” means any of the following:

242.01(1)(a) (a) A person who directly or indirectly owns, controls or holds with power to vote, 20 percent or more of the outstanding voting securities of the debtor, other than a person who holds the securities:

242.01(1)(a)1. 1. As a fiduciary or agent without sole discretionary power to vote the securities; or

242.01(1)(a)2. 2. Solely to secure a debt, if the person has not in fact exercised the power to vote.

242.01(1)(b) (b) A corporation 20 percent or more of whose outstanding voting securities are directly or indirectly owned, controlled or held with power to vote, by the debtor or a person who directly or indirectly owns, controls or holds with power to vote, 20 percent or more of the outstanding voting securities of the debtor, other than a person who holds the securities:

242.01(1)(b)1. 1. As a fiduciary or agent without sole discretionary power to vote the securities;

242.01(1)(b)2. 2. Solely to secure a debt, if the person has not in fact exercised the power to vote.

242.01(1)(c) (c) A person whose business is operated by the debtor under a lease or other agreement, or a person substantially all of whose assets are controlled by the debtor.

242.01(1)(d) (d) A person who operates the debtor’s business under a lease or other agreement or controls substantially all of the debtor’s assets.

242.01(2) (2) “Asset” means property of a debtor, but does not include any of the following:

242.01(2)(a) (a) Property to the extent it is encumbered by a valid lien.

242.01(2)(b) (b) Property to the extent it is generally exempt under nonbankruptcy law.

242.01(2)(bm) (bm) Property to the extent it is exempt under s. 815.18.

242.01(2)(c) (c) An interest in property held in tenancy by the entireties to the extent it is not subject to process by a creditor holding a claim against only one tenant.

242.01(3) (3) “Claim,” except as used in “claim for relief,” means a right to payment, whether or not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured.

242.01(4) (4) “Creditor” means a person who has a claim.

242.01(5) (5) “Debt” means liability on a claim.

242.01(6) (6) “Debtor” means a person who is liable on a claim.

242.01(6m) (6m) “Electronic” means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.

242.01(7) (7) “Insider” includes any of the following:

242.01(7)(a) (a) If the debtor is an individual:

242.01(7)(a)1. 1. A relative of the debtor or of a general partner of the debtor;

242.01(7)(a)2. 2. A partnership in which the debtor is a general partner;

242.01(7)(a)3. 3. A general partner in a partnership described in subd. 2.;

242.01(7)(a)4. 4. A corporation of which the debtor is a director, officer or person in control; or

242.01(7)(a)5. 5. A limited liability company of which the debtor is a manager or person in control.

242.01(7)(b) (b) If the debtor is a corporation:

242.01(7)(b)1. 1. A director of the debtor;

242.01(7)(b)2. 2. An officer of the debtor;

242.01(7)(b)3. 3. A person in control of the debtor;

242.01(7)(b)4. 4. A partnership in which the debtor is a general partner;

242.01(7)(b)5. 5. A general partner in a partnership described in subd. 4.; or

242.01(7)(b)6. 6. A relative of a general partner, director, officer or person in control of the debtor.

242.01(7)(bL) (bL) If the debtor is a limited liability company, any of the following:

242.01(7)(bL)1. 1. A manager of the debtor.

242.01(7)(bL)2. 2. A person in control of the debtor.

242.01(7)(bL)3. 3. A partnership in which the debtor is a general partner.

242.01(7)(bL)4. 4. A general partner in a partnership described in subd. 3.

242.01(7)(bL)5. 5. A relative of a manager or person in control of the debtor.

242.01(7)(c) (c) If the debtor is a partnership:

242.01(7)(c)1. 1. A general partner in the debtor;

242.01(7)(c)2. 2. A relative of a general partner in, a general partner of or a person in control of the debtor;

242.01(7)(c)3. 3. Another partnership in which the debtor is a general partner;

242.01(7)(c)4. 4. A general partner in a partnership described in subd. 3.; or

242.01(7)(c)5. 5. A person in control of the debtor.

242.01(7)(d) (d) An affiliate, or an insider of an affiliate as if the affiliate were the debtor.

242.01(7)(e) (e) A managing agent of the debtor.

242.01(8) (8) “Lien” means a charge against or an interest in property to secure payment of a debt or performance of an obligation, and includes a security interest created by agreement, a judicial lien obtained by legal or equitable process or proceedings, a common-law lien or a statutory lien.

242.01(8m) (8m) “Organization” means a person other than an individual.

242.01(9) (9) “Person” means an individual, estate, partnership, corporation, limited liability company, association, trust, business or nonprofit entity, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.

242.01(10) (10) “Property” means anything that may be the subject of ownership.

242.01(10m) (10m) “Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

242.01(11) (11) “Relative” means an individual related by blood within the 3rd degree of kinship as computed under s. 990.001 (16), a spouse or an individual related to a spouse within the 3rd degree as so computed, and includes an individual in an adoptive relationship within the 3rd degree.

242.01(11m) (11m) “Sign” means, with present intent to authenticate or adopt a record, any of the following:

242.01(11m)(a) (a) To execute or adopt a tangible symbol.

242.01(11m)(b) (b) To attach to or logically associate with the record an electronic symbol, sound, or process.

242.01(12) (12) “Transfer” means every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an asset, and includes payment of money, release, lease, license, and creation of a lien or other encumbrance.

242.01(13) (13) “Valid lien” means a lien that is effective against the holder of a judicial lien subsequently obtained by legal or equitable process or proceedings.

242.01 History History: 1987 a. 192; 1989 a. 278; 1993 a. 112; 1997 a. 188; 1999 a. 32, 85, 162; 2001 a. 38; 2023 a. 246.

242.01 Annotation Federal law does not preclude a labor union from bringing a state action for an alleged fraudulent conveyance by an employer when the claim does not require substantial interpretation of a collective bargaining agreement. International Machinist Association v. United States Can Co., 150 Wis. 2d 479, 441 N.W.2d 710 (1989).

242.02 242.02 Insolvency.

242.02(1) (1) In this section:

242.02(1)(a) (a) “Assets” do not include property that has been transferred, concealed or removed with intent to hinder, delay or defraud creditors or that has been transferred in a manner making the transfer voidable under this chapter.

242.02(1)(b) (b) “Debts” do not include an obligation to the extent it is secured by a valid lien on property of the debtor not included as an asset.

242.02(2) (2) A debtor is insolvent if, at a fair valuation, the sum of the debtor’s debts is greater than the sum of the debtor’s assets.

242.02(3) (3) A debtor who is generally not paying the debtor’s debts as they become due other than as a result of a bona fide dispute is presumed to be insolvent. The presumption imposes on the party against which the presumption is directed the burden of proving that the nonexistence of insolvency is more probable than its existence.

242.02 History History: 1987 a. 192; 2023 a. 246.

242.03 242.03 Value.

242.03(1) (1) Value is given for a transfer or an obligation if, in exchange for the transfer or obligation, property is transferred or an antecedent debt is secured or satisfied, but value does not include an unperformed promise made otherwise than in the ordinary course of the promisor’s business to furnish support to the debtor or another person.

242.03(2) (2) For the purposes of ss. 242.04 (1) (b) and 242.05, a person gives a reasonably equivalent value if the person acquires an interest of the debtor in an asset pursuant to a regularly conducted, noncollusive foreclosure sale or execution of a power of sale for the acquisition or disposition of the interest of the debtor upon default under a mortgage, deed of trust or security agreement.

242.03(3) (3) A transfer is made for present value if the exchange between the debtor and the transferee is intended by them to be contemporaneous and is in fact substantially contemporaneous.

242.03 History History: 1987 a. 192.

242.04 242.04 Transfer or obligation voidable as to present or future creditor.

242.04(1) (1) A transfer made or obligation incurred by a debtor is voidable as to a creditor, whether the creditor’s claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation:

242.04(1)(a) (a) With actual intent to hinder, delay or defraud any creditor of the debtor; or

242.04(1)(b) (b) Without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor: