Chapter 242

242.07 242.07 Remedies of creditors.

242.07(1) (1) In an action for relief against a transfer or obligation under this chapter, a creditor, subject to the limitations in s. 242.08, may obtain any of the following:

242.07(1)(a) (a) Avoidance of the transfer or obligation to the extent necessary to satisfy the creditor’s claim.

242.07(1)(b) (b) An attachment or other provisional remedy against the asset transferred or other property of the transferee if available under chs. 810 to 813 or other applicable law.

242.07(1)(c) (c) Subject to applicable principles of equity and in accordance with applicable rules of civil procedure:

242.07(1)(c)1. 1. An injunction against further disposition by the debtor or a transferee, or both, of the asset transferred or of other property;

242.07(1)(c)2. 2. Appointment of a receiver to take charge of the asset transferred or of other property of the transferee; or

242.07(1)(c)3. 3. Any other relief the circumstances may require.

242.07(2) (2) If a creditor has obtained a judgment on a claim against the debtor, the creditor, if the court so orders, may levy execution on the asset transferred or its proceeds.

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

242.07 Annotation Nothing in ch. 242 changes the principle of law that compensatory damages are a threshold requirement for awarding punitive damages or otherwise permits a punitive damages award. Rescission under sub. (1) is an equitable remedy and does not constitute compensatory damages. C & A Investments v. Kelly, 2010 WI App 151, 330 Wis. 2d 223, 792 N.W.2d 644, 09-2420.

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

242.08(1) (1) A transfer or obligation is not voidable under s. 242.04 (1) (a) against a person who took in good faith and for a reasonably equivalent value given the debtor or against any subsequent transferee or obligee.

242.08(2) (2) To the extent a transfer is voidable in an action by a creditor under s. 242.07 (1) (a), all of the following rules apply:

242.08(2)(am) (am) Except as otherwise provided in this section, the creditor may recover judgment for the value of the asset transferred, as adjusted under sub. (3), or the amount necessary to satisfy the creditor’s claim, whichever is less. The judgment may be entered against any of the following:

242.08(2)(am)1. 1. The first transferee of the asset or the person for whose benefit the transfer was made.

242.08(2)(am)2. 2. An immediate or mediate transferee of the first transferee, other than any of the following:

242.08(2)(am)2.a. a. A good faith transferee who took for value.

242.08(2)(am)2.b. b. An immediate or mediate good faith transferee of a person described in subd. 2. a.

242.08(2)(bm) (bm) Recovery pursuant to s. 242.07 (1) (a) or (2) of or from the asset transferred or its proceeds, by levy or otherwise, is available only against a person described in par. (am) 1. or 2.

242.08(3) (3) If the judgment under sub. (2) is based upon the value of the asset transferred, the judgment must be for an amount equal to the value of the asset at the time of the transfer, subject to adjustment as the equities may require.

242.08(4) (4) Notwithstanding voidability of a transfer or an obligation under this chapter, a good-faith transferee or obligee is entitled, to the extent of the value given the debtor for the transfer or obligation, to any of the following:

242.08(4)(a) (a) A lien on or a right to retain any interest in the asset transferred.

242.08(4)(b) (b) Enforcement of any obligation incurred.

242.08(4)(c) (c) A reduction in the amount of the liability on the judgment.

242.08(5) (5) A transfer is not voidable under s. 242.04 (1) (b) or 242.05 if the transfer results from any of the following:

242.08(5)(a) (a) Termination of a lease upon default by the debtor when the termination is pursuant to the lease and applicable law.

242.08(5)(b) (b) Enforcement of a security interest in compliance with ch. 409, other than acceptance of collateral in full or partial satisfaction of the obligation it secures.

242.08(6) (6) A transfer is not voidable under s. 242.05 (2):

242.08(6)(a) (a) To the extent that the insider gave new value to or for the benefit of the debtor after the transfer was made unless the new value was secured by a valid lien;

242.08(6)(b) (b) If made in the ordinary course of business or financial affairs of the debtor and the insider; or

242.08(6)(c) (c) If made pursuant to a good-faith effort to rehabilitate the debtor and the transfer secured present value given for that purpose as well as an antecedent debt of the debtor.

242.08(7) (7) The following rules determine the burden of proving matters referred to in this section:

242.08(7)(a) (a) A party that seeks to invoke sub. (1), (4), (5), or (6) has the burden of proving the applicability of that subsection.

242.08(7)(b) (b) Except as otherwise provided in pars. (c) and (d), the creditor has the burden of proving each applicable element of sub. (2) or (3).

242.08(7)(c) (c) The transferee has the burden of proving the applicability to the transferee of sub. (2) (am) 2. a. or b.

242.08(7)(d) (d) A party that seeks adjustment under sub. (3) has the burden of proving the adjustment.

242.08(8) (8) The standard of proof required to establish matters referred to in this section is preponderance of the evidence.

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

242.08 Annotation The good-faith defense under sub.(1) applies only to claims made under s. 242.04 (1) (a), not claims under other sections. Badger State Bank v. Taylor, 2004 WI 128, 276 Wis. 2d 312, 688 N.W.2d 439, 03-0750.

242.09 242.09 Statute of limitation. Actions under this chapter are barred as provided in s. 893.425.

242.09 History History: 1987 a. 192.

242.094 242.094 Governing law.

242.094(1) (1) In this section, the following rules determine a debtor’s location:

242.094(1)(a) (a) A debtor who is an individual is located at the individual’s principal residence.

242.094(1)(b) (b) A debtor that is an organization and has only one place of business is located at its place of business.

242.094(1)(c) (c) A debtor that is an organization and that has more than one place of business is located at its chief executive office.

242.094(2) (2) A claim for relief in the nature of a claim for relief under this chapter is governed by the local law of the jurisdiction in which the debtor is located when the transfer is made or the obligation is incurred.

242.094 History History: 2023 a. 246.

242.096 242.096 Application to series organization.

242.096(1) (1) In this section:

242.096(1)(a) (a) “Protected series” means an arrangement, however denominated, created by a series organization that, pursuant to the law under which the series organization is organized, has the characteristics set forth in par. (b).

242.096(1)(b) (b) “Series organization” means an organization that, pursuant to the law under which it is organized, has the following characteristics:

242.096(1)(b)1. 1. The organic record of the organization provides for creation by the organization of one or more protected series, however denominated, with respect to specified property of the organization, and for records to be maintained for each protected series that identify the property of or associated with the protected series.

242.096(1)(b)2. 2. Debt incurred or existing with respect to the activities of, or property of or associated with, a particular protected series is enforceable against the property of or associated with the protected series only, and not against the property of or associated with the organization or other protected series of the organization.

242.096(1)(b)3. 3. Debt incurred or existing with respect to the activities or property of the organization is enforceable against the property of the organization only, and not against the property of or associated with a protected series of the organization.

242.096(2) (2) A series organization and each protected series of the organization is a separate person for purposes of this chapter, even if for other purposes a protected series is not a person separate from the organization or other protected series of the organization.

242.096 History History: 2023 a. 246.

242.10 242.10 Supplementary provisions. Unless displaced by this chapter, the principles of law and equity, including the law merchant and the law relating to principal and agent, estoppel, laches, fraud, misrepresentation, duress, coercion, mistake, insolvency or other validating or invalidating cause, supplement this chapter.

242.10 History History: 1987 a. 192.

242.11 242.11 Uniformity of application and construction. This chapter shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this chapter among states enacting it.

242.11 History History: 1987 a. 192.

242.11 Annotation This section provides an explicit invitation for a court to consider the way other jurisdictions have interpreted the same language in the Uniform Fraudulent Transfer Act [now the Uniform Voidable Transactions Law]. Beck v. BidRX, LLC, 2018 WI App 61, 384 Wis. 2d 207, 918 N.W.2d 96, 17-2043.

242.11 Annotation The legislature expressly stated its intent that the Uniform Fraudulent Transfer Act [now the Uniform Voidable Transactions Law] should be construed to accomplish uniformity among states enacting it. Official Committee of Unsecured Creditors of Great Lakes Quick Lube LP v. Theisen, 2018 WI App 70, 384 Wis. 2d 580, 920 N.W.2d 356, 18-0333.

242.12 242.12 Relation to electronic signatures in global and national commerce act. This chapter modifies, limits, or supersedes the federal Electronic Signatures in Global and National Commerce Act, 15 USC 7001 to 7031, but does not modify, limit, or supersede section 101 (c) of that act, 15 USC 7001 (c), or authorize electronic delivery of any of the notices described in section 103 (b) of that act, 15 USC 7003 (b).

242.12 History History: 2023 a. 246.

242.13 242.13 Short title. This chapter may be cited as the Uniform Voidable Transactions Law.

242.13 History History: 2023 a. 246.