Section 21.78.251. Fraudulent transfer after petition.

   (a) After a petition for rehabilitation or liquidation has been filed, a transfer of the real property of the insurer made to a person acting in good faith is valid against the receiver if made for a present fair equivalent value, or, if not made for a present fair equivalent value, then to the extent of the present consideration actually paid, for which amount the transferee has a lien on the property transferred. The commencement of a proceeding in rehabilitation or liquidation is constructive notice upon the recording of a copy of the petition for, or order of, rehabilitation or liquidation with the recorder of deeds in the jurisdiction where the real property in question is located. The exercise by a court of the United States, or any state or jurisdiction, to authorize or effect a judicial sale of real property of the insurer in any county or borough in any state is not impaired by the pendency of a proceeding unless the copy is recorded in the county or borough before the consummation of the judicial sale.
   (b) After a petition for rehabilitation or liquidation has been filed, and before either the receiver takes possession of the property of the insurer or an order of rehabilitation or liquidation is granted,
        (1) a transfer of any of the property of the insurer, other than real property, made to a person acting in good faith is valid against the receiver if made for a present fair equivalent value, or, if not made for a fair equivalent value, then to the extent of the present consideration actually paid, for which amount the transferee has a lien on the property transferred;
        (2) a person indebted to the insurer or holding property of the insurer may, if acting in good faith, pay the indebtedness or deliver the property, or any part of it, to the insurer or upon the insurer's order, with the same effect as if the petition were not pending;
        (3) a person having actual knowledge of the pending rehabilitation or liquidation is considered not to have acted in good faith;
        (4) a person asserting the validity of a transfer under this section has the burden of proof.
   (c) Except as otherwise provided in this section, a transfer by or on behalf of the insurer after the date of the petition for liquidation by a person other than the receiver is not valid against the receiver.
   (d) Nothing in this section impairs the negotiability of currency or negotiable instruments.

Notes

History

(Sec. 73 ch 50 SLA 1990)