When a company has an existing or anticipated obligation, but then moves its assets to avoid paying that obligation, that’s a big problem for company creditors.

The Fraudulent Transfer Act insures the viability of commercial transactions, particularly in lending and finance. Without this act, A debtor could easily gift away his or her assets to relatives and friends to avoid debt, leaving the creditor high and dry.

Fortunately, those transfers of assets can be undone and the debtors held responsible for their obligation to creditors.