Fraudulent Transfer as a Tort

Abstract

Fraudulent transfer law has historically been an in rem right of a creditor to the property fraudulently received by a third party. In a minority of states, courts have treated fraudulent transfers as creating in personam liability of the transferring debtor, the recipient and any other third party who "conspired" with the transferor to achieve the transfer. This article examines the wisdom of this modern trend and finds it wanting. The United States Supreme Court in 1861 was correct: fraudulent transfers are not wrongs. They merely created in rem rights.