The first indorsement in a chain of transfers of a mortgage note was simply a stamp, without an accompanying signature or initials. After falling behind on mortgage payments, Bass, relying on Econo-Travel Motor Hotel Corp. v. Taylor, 301 N.C. 200 (1980), challenged the standing of U.S. Bank as the holder of the note, arguing that it had not been properly indorsed.
The North Carolina Supreme Court rejected this argument relying on the broad definition of “signature” in the Uniform Commercial Code (UCC), at N.C.G.S. § 25-3-201(b)(37), as “any symbol executed or adopted with present intention to adopt or accept a writing.” As the official comment to the UCC includes that such symbol can be “printed, stamped or written; it may be by initials or by thumbprint”, the term “signature” is not limited to “a long-form writing of an individual person’s name.” Bass at 7.… Read More
The Debtor owned real property with her husband as tenants by the entireties, but then separated. Pursuant to a Separation Agreement, the Debtor signed a Quit Claim Deed granting the property to her husband in 2005 and the parties divorced in 2006. She later filed Chapter 13 on December 3, 2008, but, apparently unbeknownst to the Trustee, the Quit Claim Deed was not recorded until January 9, 2009, one day after the §341 Meeting of Creditors. The Debtor’s confirmed plan abandoned her interest in the property to the secured creditors. In 2010, she converted to Chapter 7 and the Trustee initiated an adversary proceeding to avoid the transfer under 11 U.S.C.… Read More
A few hours prior to a foreclosure sale, 15 parcels of real property were transferred to the Debtors by three corporations owed by the Debtors. The Debtors shortly thereafter filed Chapter 11. BB&T commenced an Adversary Proceeding seeking to avoid the transfers as fraudulent conveyances and because some were made ultra vires and brought a Motion for Summary Judgment.
In determining whether a transfer was a fraudulent conveyance the court first turned to the non-exclusive list of factors found in N.C. Gen. Stat. 39-23.4(b):
- The transfer or obligation was to an insider;
- The debtor retained possession or control of the property transferred after the transfer;
- The transfer or obligation was disclosed or concealed;
- Before the transfer was made or obligation was incurred, the debtor had been sued or threatened with suit;
- The transfer was of substantially all of the debtor’s assets;
- The debtor absconded;
- The debtor removed or concealed assets;
- The value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred;
- The debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred;
- The transfer occurred shortly before or shortly after a substantial debt was incurred;
- The debtor transferred the essential assets of the business to a lienor who transferred the assets to an insider of the debtor;
- The debtor made the transfer or incurred the obligation without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor reasonably should have believed that the debtor would incur debts beyond the debtor’s ability to pay as they became due; and
- The debtor transferred the assets in the course of legitimate estate or tax planning.
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