2020 Code of Alabama
Title 8 - Commercial Law and Consumer Protection.
Chapter 9B - Alabama Uniform Voidable Transactions Act
Section 8-9B-9 - Defenses, Liability, and Protection of Transferee.

Section 8-9B-9

Defenses, liability, and protection of transferee.

(a) A transfer is not voidable under Section 8-9B-5(a)(1) against a person that took in good faith and for a reasonably equivalent value given the debtor or against any subsequent transferee that took in good faith.

(b) To the extent a transfer is avoidable in an action by a creditor under Section 8-9B-8(a)(1), the following rules apply:

(1) Except as otherwise provided in this section, the creditor may recover judgment for the value of the asset transferred, as adjusted under subsection (c), or the amount necessary to satisfy the creditor’s claim, whichever is less. The judgment may be entered against:

(i) the first transferee of the asset or the person for whose benefit the transfer was made; or

(ii) any subsequent transferee, other than:

(A) a good-faith transferee that took for value; or

(B) a subsequent transferee of a person described in clause (A).

(2) Recovery pursuant to Section 8-9B-8(a)(1) or (b) of or from the asset transferred or its proceeds, by levy or otherwise, is available only against a person described in paragraph (1)(i) or (ii).

(c) If the judgment under subsection (b) 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.

(d) Notwithstanding voidability of a transfer under this chapter, a good-faith transferee is entitled, to the extent of the value given the debtor for the transfer, to:

(1) a lien on or a right to retain an interest in the asset transferred; or

(2) a reduction in the amount of the liability on the judgment.

(e) A transfer is not voidable under Section 8-9B-5(a)(2) or Section 8-9B-6 if the transfer results from:

(1) termination of a lease upon default by the debtor when the termination is pursuant to the lease and applicable law;

(2) enforcement of a security interest in compliance with Article 9 of the Uniform Commercial Code, Article 9A, commencing with Section 7-9A-1, of Title 7, other than acceptance of collateral in full or partial satisfaction of the obligation it secures; or

(3) a regularly conducted, noncollusive foreclosure sale or execution of a power of sale for the acquisition or disposition of the interest of the debtor under a mortgage, deed of trust, or security agreement.

(f) A transfer is not voidable under Section 8-9B-6(b):

(1) to the extent the insider gave new value to or for the benefit of the debtor after the transfer was made, except to the extent the new value was secured by a valid lien;

(2) if made in the ordinary course of business or financial affairs of the debtor and the insider; or

(3) 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.

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

(1) A party that seeks to invoke subsection (a), (d), (e), or (f) has the burden of proving the applicability of that subsection.

(2) Except as otherwise provided in paragraphs (3) and (4), the creditor has the burden of proving each applicable element of subsection (b) or (c).

(3) The transferee has the burden of proving the applicability to the transferee of subsection (b)(1)(ii)(A) or (B).

(4) A party that seeks adjustment under subsection (c) has the burden of proving the adjustment.

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

(Act 2018-163, §1.)