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1 | AN ACT concerning civil law. | |||||||||||||||||||
2 | Be it enacted by the People of the State of Illinois, | |||||||||||||||||||
3 | represented in the General Assembly: | |||||||||||||||||||
4 | Section 5. The Illinois Insurance Code is amended by | |||||||||||||||||||
5 | changing Sections 35B-25 and 204 as follows: | |||||||||||||||||||
6 | (215 ILCS 5/35B-25) | |||||||||||||||||||
7 | Sec. 35B-25. Plan of division approval. | |||||||||||||||||||
8 | (a) A division shall not become effective until it is | |||||||||||||||||||
9 | approved by the Director after reasonable notice and a public | |||||||||||||||||||
10 | hearing, if the notice and hearing are deemed by the Director | |||||||||||||||||||
11 | to be in the public interest. Any decision by the Director on | |||||||||||||||||||
12 | whether or not to hold a public hearing on either a plan of | |||||||||||||||||||
13 | division or an amended plan of division may be made | |||||||||||||||||||
14 | independently by the Director. The Director shall hold a | |||||||||||||||||||
15 | public hearing if one is requested by the dividing company. A | |||||||||||||||||||
16 | hearing conducted under this Section shall be conducted in | |||||||||||||||||||
17 | accordance with Article 10 of the Illinois Administrative | |||||||||||||||||||
18 | Procedure Act. | |||||||||||||||||||
19 | (b) The Director shall approve a plan of division unless | |||||||||||||||||||
20 | the Director finds that: | |||||||||||||||||||
21 | (1) the interest of any class of policyholder or | |||||||||||||||||||
22 | shareholder of the dividing company will not be properly | |||||||||||||||||||
23 | protected; |
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1 | (2) each new company created by the proposed division, | ||||||
2 | except a new company that is a nonsurviving party to a | ||||||
3 | merger pursuant to subsection (b) of Section 156, would be | ||||||
4 | ineligible to receive a license to do insurance business | ||||||
5 | in this State pursuant to Section 5; | ||||||
6 | (2.5) each new company created by the proposed | ||||||
7 | division, except a new company that is a nonsurviving | ||||||
8 | party to a merger pursuant to subsection (b) of Section | ||||||
9 | 156, that will be a member insurer of the Illinois Life and | ||||||
10 | Health Insurance Guaranty Association and that will have | ||||||
11 | policy liabilities allocated to it will not be licensed to | ||||||
12 | do insurance business in each state where such policies | ||||||
13 | were written by the dividing company; | ||||||
14 | (3) the proposed division violates a provision of the | ||||||
15 | Uniform Voidable Transactions Fraudulent Transfer Act; | ||||||
16 | (4) the division is being made for purposes of | ||||||
17 | hindering, delaying, or defrauding any policyholders or | ||||||
18 | other creditors of the dividing company; | ||||||
19 | (5) one or more resulting companies will not be | ||||||
20 | solvent upon the consummation of the division; or | ||||||
21 | (6) the remaining assets of one or more resulting | ||||||
22 | companies will be, upon consummation of a division, | ||||||
23 | unreasonably small in relation to the business and | ||||||
24 | transactions in which the resulting company was engaged or | ||||||
25 | is about to engage. | ||||||
26 | (c) In determining whether the standards set forth in |
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1 | paragraph (3) of subsection (b) have been satisfied, the | ||||||
2 | Director shall only apply the Uniform Voidable Transactions | ||||||
3 | Fraudulent Transfer Act to a dividing company in its capacity | ||||||
4 | as a resulting company and shall not apply the Uniform | ||||||
5 | Voidable Transactions Fraudulent Transfer Act to any dividing | ||||||
6 | company that is not proposed to survive the division. | ||||||
7 | (d) In determining whether the standards set forth in | ||||||
8 | paragraphs (3), (4), (5), and (6) of subsection (b) have been | ||||||
9 | satisfied, the Director may consider all proposed assets of | ||||||
10 | the resulting company, including, without limitation, | ||||||
11 | reinsurance agreements, parental guarantees, support or keep | ||||||
12 | well agreements, or capital maintenance or contingent capital | ||||||
13 | agreements, in each case, regardless of whether the same would | ||||||
14 | qualify as an admitted asset as defined in Section 3.1. | ||||||
15 | (e) In determining whether the standards set forth in | ||||||
16 | paragraph (3) of subsection (b) have been satisfied, with | ||||||
17 | respect to each resulting company, the Director shall, in | ||||||
18 | applying the Uniform Voidable Transactions Fraudulent Transfer | ||||||
19 | Act, treat: | ||||||
20 | (1) the resulting company as a debtor; | ||||||
21 | (2) liabilities allocated to the resulting company as | ||||||
22 | obligations incurred by a debtor; | ||||||
23 | (3) the resulting company as not having received | ||||||
24 | reasonably equivalent value in exchange for incurring the | ||||||
25 | obligations; and | ||||||
26 | (4) assets allocated to the resulting company as |
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1 | remaining property. | ||||||
2 | (f) All information, documents, materials, and copies | ||||||
3 | thereof submitted to, obtained by, or disclosed to the | ||||||
4 | Director in connection with a plan of division or in | ||||||
5 | contemplation thereof, including any information, documents, | ||||||
6 | materials, or copies provided by or on behalf of a domestic | ||||||
7 | stock company in advance of its adoption or submission of a | ||||||
8 | plan of division, shall be confidential and shall be subject | ||||||
9 | to the same protection and treatment in accordance with | ||||||
10 | Section 131.22 as documents and reports disclosed to or filed | ||||||
11 | with the Director pursuant to subsection (a) of Section | ||||||
12 | 131.14b until such time, if any, as a notice of the hearing | ||||||
13 | contemplated by subsection (a) is issued. | ||||||
14 | (g) From and after the issuance of a notice of the hearing | ||||||
15 | contemplated by subsection (a), all business, financial, and | ||||||
16 | actuarial information that the domestic stock company requests | ||||||
17 | confidential treatment, other than the plan of division, shall | ||||||
18 | continue to be confidential and shall not be available for | ||||||
19 | public inspection and shall be subject to the same protection | ||||||
20 | and treatment in accordance with Section 131.22 as documents | ||||||
21 | and reports disclosed to or filed with the Director pursuant | ||||||
22 | to subsection (a) of Section 131.14b. | ||||||
23 | (h) All expenses incurred by the Director in connection | ||||||
24 | with proceedings under this Section, including expenses for | ||||||
25 | the services of any attorneys, actuaries, accountants, and | ||||||
26 | other experts as may be reasonably necessary to assist the |
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1 | Director in reviewing the proposed division, shall be paid by | ||||||
2 | the dividing company filing the plan of division. A dividing | ||||||
3 | company may allocate expenses described in this subsection in | ||||||
4 | a plan of division in the same manner as any other liability. | ||||||
5 | (i) If the Director approves a plan of division, the | ||||||
6 | Director shall issue an order that shall be accompanied by | ||||||
7 | findings of fact and conclusions of law. | ||||||
8 | (j) The conditions in this Section for freeing one or more | ||||||
9 | of the resulting companies from the liabilities of the | ||||||
10 | dividing company and for allocating some or all of the | ||||||
11 | liabilities of the dividing company shall be conclusively | ||||||
12 | deemed to have been satisfied if the plan of division has been | ||||||
13 | approved by the Director in a final order that is not subject | ||||||
14 | to further appeal. | ||||||
15 | (k) If a dividing company amends its plan of division at | ||||||
16 | any time before the plan of division becomes effective, | ||||||
17 | including after the Director's approval of the plan or after | ||||||
18 | any hearing has been conducted under this Section, then the | ||||||
19 | dividing company shall file the amended plan of division for | ||||||
20 | approval by the Director pursuant to the provisions of this | ||||||
21 | Section. If the Director has already issued an order approving | ||||||
22 | the dividing company's previous plan of division under | ||||||
23 | subsection (i), then that order shall not be rescinded by the | ||||||
24 | Director's subsequent disapproval of an amended plan. | ||||||
25 | (1) If a hearing is conducted on the amended plan of | ||||||
26 | division after the Director has approved a previous plan |
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1 | of division, then the hearing shall not be considered a | ||||||
2 | rehearing or a reopening of any hearing conducted on the | ||||||
3 | previous plan. Nothing in this Section shall prohibit the | ||||||
4 | dividing company from requesting a rehearing or reopening | ||||||
5 | of any hearing conducted on any disapproved plan of | ||||||
6 | division, amended or otherwise. | ||||||
7 | (2) Whether under direct review or in a hearing, the | ||||||
8 | Director may rely on information already submitted or | ||||||
9 | developed in connection with the previous plan of | ||||||
10 | division, as well as any findings of fact or conclusions | ||||||
11 | of law if a hearing has been conducted or an approval order | ||||||
12 | has been issued on the previous plan, to the extent the | ||||||
13 | information, findings, or conclusions remain relevant to | ||||||
14 | the amended plan of division, and the Director shall | ||||||
15 | collect any other information necessary to make a | ||||||
16 | determination under subsection (b). | ||||||
17 | (3) The fee assessed under Section 408 for filing a | ||||||
18 | plan of division shall not apply to the filing of an | ||||||
19 | amended plan of division, but subsection (h) shall apply | ||||||
20 | to all proceedings related to the amended plan. | ||||||
21 | (Source: P.A. 102-394, eff. 8-16-21; 102-578, eff. 7-1-22 (See | ||||||
22 | Section 5 of P.A. 102-672 for effective date of P.A. 102-578); | ||||||
23 | 103-90, eff. 6-9-23.) | ||||||
24 | (215 ILCS 5/204) (from Ch. 73, par. 816) | ||||||
25 | Sec. 204. Prohibited and voidable transfers and liens. |
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1 | (a)(1) A preference is a transfer of any of the property of | ||||||
2 | a company to or for the benefit of a creditor, for or on | ||||||
3 | account of an antecedent debt, made or suffered by the company | ||||||
4 | within 2 years before the filing of a complaint under this | ||||||
5 | Article, the effect of which may be to enable the creditor to | ||||||
6 | obtain a greater percentage of this debt than another creditor | ||||||
7 | of the same class would receive. | ||||||
8 | (2) Any preference may be avoided by the Director as | ||||||
9 | rehabilitator, liquidator, or conservator if: | ||||||
10 | (A) the company was insolvent at the time of the | ||||||
11 | transfer; and | ||||||
12 | (B) the transfer was made within 4 months before the | ||||||
13 | filing of the complaint; or the creditor receiving it was | ||||||
14 | (i) an officer, or any employee or attorney or other | ||||||
15 | person who was in fact in a position of comparable | ||||||
16 | influence in the company to an officer whether or not that | ||||||
17 | person held such a position, (ii) any shareholder holding, | ||||||
18 | directly or indirectly, more than 5% of any class of any | ||||||
19 | equity security issued by the company, or (iii) any other | ||||||
20 | person, firm, corporation, association, or aggregation of | ||||||
21 | individuals with whom the company did not deal at arm's | ||||||
22 | length. | ||||||
23 | (3) Where the preference is voidable, the Director as | ||||||
24 | rehabilitator, liquidator, or conservator may recover the | ||||||
25 | property or, if it has been converted, its value from any | ||||||
26 | person who has received or converted the property; except |
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1 | where a bona fide purchaser or lienor has given less than fair | ||||||
2 | equivalent value, the purchaser or lienor shall have a lien | ||||||
3 | upon the property to the extent of the consideration actually | ||||||
4 | given. Where a preference by way of lien or security title is | ||||||
5 | voidable, the court may on due notice order the lien or title | ||||||
6 | to be preserved for the benefit of the estate, in which event | ||||||
7 | the lien or title shall pass to the Director as rehabilitator | ||||||
8 | or liquidator. | ||||||
9 | (b)(1) A transfer of property other than real property | ||||||
10 | shall be deemed to be made or suffered when it becomes so far | ||||||
11 | perfected that no subsequent lien obtainable by legal or | ||||||
12 | equitable proceedings on a simple contract could become | ||||||
13 | superior to the rights of the transferee. | ||||||
14 | (2) A transfer of real property shall be deemed to be made | ||||||
15 | or suffered when it becomes so far perfected that no | ||||||
16 | subsequent bona fide purchaser from the company could obtain | ||||||
17 | rights superior to the rights of the transferee. | ||||||
18 | (3) A transfer that creates an equitable lien shall not be | ||||||
19 | deemed to be perfected if there are available means by which a | ||||||
20 | legal lien could be created. | ||||||
21 | (4) A transfer not perfected before the filing of a | ||||||
22 | complaint shall be deemed to be made immediately before the | ||||||
23 | filing of the complaint. | ||||||
24 | (5) The provisions of this subsection apply whether or not | ||||||
25 | there are or were creditors who might have obtained liens or | ||||||
26 | persons who might have become bona fide purchasers. |
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1 | (c) For purposes of this Section: | ||||||
2 | (1) A lien obtainable by legal or equitable | ||||||
3 | proceedings upon a simple contract is one arising in the | ||||||
4 | ordinary course of the proceedings upon the entry or | ||||||
5 | docketing of a judgment or decree, or upon attachment, | ||||||
6 | garnishment, execution, or like process, whether before, | ||||||
7 | upon, or after judgment or decree and whether before or | ||||||
8 | upon levy. It does not include liens that, under | ||||||
9 | applicable law, are given a special priority over other | ||||||
10 | liens that are prior in time. | ||||||
11 | (2) A lien obtainable by legal or equitable | ||||||
12 | proceedings could become superior to the rights of a | ||||||
13 | transferee, or a purchaser could obtain rights superior to | ||||||
14 | the rights of a transferee within the meaning of | ||||||
15 | subsection (b) of this Section, if such consequences would | ||||||
16 | follow only from the lien or purchase itself, or from the | ||||||
17 | lien or purchase followed by any step wholly within the | ||||||
18 | control of the respective lienholder or purchaser, with or | ||||||
19 | without the aid of ministerial action by public officials. | ||||||
20 | A lien could not, however, become superior and a purchase | ||||||
21 | could not create superior rights for the purpose of | ||||||
22 | subsection (b) of this Section through any acts subsequent | ||||||
23 | to an obtaining of the lien or subsequent to a purchase | ||||||
24 | that requires the agreement or concurrence of any third | ||||||
25 | party or that requires any further judicial action or | ||||||
26 | ruling. |
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1 | (d) A transfer of property for or on account of a new and | ||||||
2 | contemporaneous consideration which is deemed under subsection | ||||||
3 | (b) of this Section to be made or suffered after the transfer | ||||||
4 | because of delay in perfecting it does not thereby become a | ||||||
5 | transfer for or on account of an antecedent debt if any acts | ||||||
6 | required by the applicable law to be performed in order to | ||||||
7 | perfect the transfer as against liens or bona fide purchasers' | ||||||
8 | rights are performed within 21 days or any period expressly | ||||||
9 | allowed by the law, whichever is less. A transfer to secure a | ||||||
10 | future loan, if the loan is actually made, or a transfer that | ||||||
11 | becomes security for a future loan, shall have the same effect | ||||||
12 | as a transfer for or on account of a new and contemporaneous | ||||||
13 | consideration. | ||||||
14 | (e) If any lien deemed voidable under part (2) of | ||||||
15 | subsection (a) of this Section has been dissolved by the | ||||||
16 | furnishing of a bond or other obligation, the surety on which | ||||||
17 | has been indemnified directly or indirectly by the transfer of | ||||||
18 | or the creation of a lien upon any property of a company before | ||||||
19 | the filing of a complaint under this Article, the indemnifying | ||||||
20 | transfer or lien shall also be deemed voidable. | ||||||
21 | (f) The property affected by any lien deemed voidable | ||||||
22 | under subsections (a) and (e) of this Section shall be | ||||||
23 | discharged from the lien, and that property and any of the | ||||||
24 | indemnifying property transferred to or for the benefit of a | ||||||
25 | surety shall pass to the Director as rehabilitator or | ||||||
26 | liquidator, except that the court may, on due notice, order |
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1 | any such lien to be preserved for the benefit of the estate and | ||||||
2 | the court may direct that such conveyance be executed as may be | ||||||
3 | proper or adequate to evidence the title of the Director as | ||||||
4 | rehabilitator or liquidator. | ||||||
5 | (g) The court shall have summary jurisdiction over any | ||||||
6 | proceeding by the Director as rehabilitator, liquidator, or | ||||||
7 | conservator to hear and determine the rights of any parties | ||||||
8 | under this Section. Reasonable notice of any hearings in the | ||||||
9 | proceeding shall be given to all parties in interest, | ||||||
10 | including the obligee of a releasing bond or other life | ||||||
11 | obligation. Where an order is entered for the recovery of | ||||||
12 | indemnifying property in kind or for the avoidance of an | ||||||
13 | indemnifying lien, the court, upon application of any party in | ||||||
14 | interest, shall in the same proceeding ascertain the value of | ||||||
15 | the property or lien, and if the value is less than the amount | ||||||
16 | for which the property is indemnity or than the amount of the | ||||||
17 | lien, the transferee or lienholder may elect to retain the | ||||||
18 | property or lien upon payment of its value, as ascertained by | ||||||
19 | the court, to the Director as rehabilitator, liquidator, or | ||||||
20 | conservator, within such reasonable times as the court shall | ||||||
21 | fix. | ||||||
22 | (h) The liability of the surety under the releasing bond | ||||||
23 | or other similar obligation shall be discharged to the extent | ||||||
24 | of the value of the indemnifying property recovered or the | ||||||
25 | indemnifying lien nullified and avoided by the Director as | ||||||
26 | rehabilitator, liquidator, or conservator. Where the property |
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1 | is retained under subsection (g) of this Section, the | ||||||
2 | liability shall be discharged to the extent of the amount paid | ||||||
3 | to the Director as rehabilitator, liquidator, or conservator. | ||||||
4 | (i) If a creditor has been preferred and thereafter in | ||||||
5 | good faith gives the company further credit without security | ||||||
6 | of any kind, for property which becomes a part of the company's | ||||||
7 | estate, the amount of the new credit remaining unpaid at the | ||||||
8 | time of the petition may be set off against the preference | ||||||
9 | which would otherwise be recoverable from the creditor. | ||||||
10 | (j) If a company shall, directly or indirectly, within 4 | ||||||
11 | months before the filing of a complaint under this Article, or | ||||||
12 | at any time in contemplation of such a proceeding, pay money or | ||||||
13 | transfer property to any attorney for services rendered or to | ||||||
14 | be rendered, the transactions may be examined by the court on | ||||||
15 | its own motion or shall be examined by the court on petition of | ||||||
16 | the Director as rehabilitator, liquidator, or conservator and | ||||||
17 | shall be held valid only to the extent of a reasonable amount | ||||||
18 | to be determined by the court, and the excess may be recovered | ||||||
19 | by the Director as rehabilitator, liquidator, or conservator | ||||||
20 | for the benefit of the estate provided that where the attorney | ||||||
21 | is in a position of influence in the company or an affiliate | ||||||
22 | thereof payment of any money or the transfer of any property to | ||||||
23 | the attorney for services rendered or to be rendered shall be | ||||||
24 | governed by item (B) of part (2) of subsection (a) of this | ||||||
25 | Section. | ||||||
26 | (k)(1) An officer, director, manager, employee, |
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1 | shareholder, member, subscriber, attorney, or other person | ||||||
2 | acting on behalf of the company who knowingly participates in | ||||||
3 | giving any preference when that officer, director, manager, | ||||||
4 | employee, shareholder, member, subscriber, attorney, or other | ||||||
5 | person has reasonable cause to believe the company is or is | ||||||
6 | about to become insolvent at the time of the preference shall | ||||||
7 | be personally liable to the Director as rehabilitator, | ||||||
8 | liquidator, or conservator for the amount of the preference. | ||||||
9 | There is a reasonable cause to so believe if the transfer was | ||||||
10 | made within 4 months before the date of filing of the | ||||||
11 | complaint. | ||||||
12 | (2) A person receiving any property from the company or | ||||||
13 | the benefit thereof as a preference voidable under subsection | ||||||
14 | (a) of this Section shall be personally liable therefor and | ||||||
15 | shall be bound to account to the Director as rehabilitator, | ||||||
16 | liquidator, or conservator. | ||||||
17 | (3) Nothing in this Section shall prejudice any other | ||||||
18 | claim by the Director as rehabilitator, liquidator, or | ||||||
19 | conservator against any person. | ||||||
20 | (l) For purposes of this Section, the company is presumed | ||||||
21 | to have been insolvent on and during the 4 month period | ||||||
22 | immediately preceding the date of the filing of the complaint. | ||||||
23 | (m) The Director as rehabilitator, liquidator, or | ||||||
24 | conservator may not avoid a transfer under this Section to the | ||||||
25 | extent that the transfer was: | ||||||
26 | (A) Intended by the company and the creditor to or for |
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1 | whose benefit the transfer was made to be a | ||||||
2 | contemporaneous exchange for new value given to the | ||||||
3 | company, and was in fact a substantially contemporaneous | ||||||
4 | exchange; or | ||||||
5 | (B) In payment of a debt incurred by the company in the | ||||||
6 | ordinary course of business or financial affairs of the | ||||||
7 | company and the transferee; made in the ordinary course of | ||||||
8 | business or financial affairs of the company and the | ||||||
9 | transferee; and made according to ordinary business terms; | ||||||
10 | (C) In the case of a transfer by a company where the | ||||||
11 | Director has determined that an event described in Section | ||||||
12 | 35A-25 or 35A-30 has occurred, specifically approved by | ||||||
13 | the Director in writing pursuant to this subsection, | ||||||
14 | whether or not the company is in receivership under this | ||||||
15 | Article. Upon approval by the Director, such a transfer | ||||||
16 | cannot later be found to constitute a prohibited or | ||||||
17 | voidable transfer based solely upon a deviation from the | ||||||
18 | statutory payment priorities established by law for any | ||||||
19 | subsequent receivership; or | ||||||
20 | (D) Of money or other property arising under or in | ||||||
21 | connection with any Federal Home Loan Bank security | ||||||
22 | agreement or any pledge, security, collateral or guarantee | ||||||
23 | agreement, or any other similar arrangement or credit | ||||||
24 | enhancement relating to a Federal Home Loan Bank security | ||||||
25 | agreement. | ||||||
26 | (n) The Director as rehabilitator, liquidator, or |
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1 | conservator may avoid any transfer of or lien upon the | ||||||
2 | property of a company that the estate of the company or a | ||||||
3 | policyholder, creditor, member, or stockholder of the company | ||||||
4 | may have avoided, and the Director as rehabilitator, | ||||||
5 | liquidator, or conservator may recover and collect the | ||||||
6 | property so transferred or its value from the person to whom it | ||||||
7 | was transferred unless the property was transferred to a bona | ||||||
8 | fide holder for value before the filing of the complaint. The | ||||||
9 | Director as rehabilitator, liquidator, or conservator shall be | ||||||
10 | deemed a creditor for purposes of pursuing claims under the | ||||||
11 | Uniform Voidable Transactions Fraudulent Transfer Act. | ||||||
12 | (o) Notwithstanding any provision of this Article to the | ||||||
13 | contrary, a Federal Home Loan Bank shall not be stayed, | ||||||
14 | enjoined, or prohibited from exercising or enforcing any right | ||||||
15 | or cause of action regarding collateral pledged under any | ||||||
16 | security agreement or any pledge, security, collateral or | ||||||
17 | guarantee agreement, or any other similar arrangement or | ||||||
18 | credit enhancement relating to a Federal Home Loan Bank | ||||||
19 | security agreement. | ||||||
20 | (Source: P.A. 100-89, eff. 8-11-17.) | ||||||
21 | Section 10. The Uniform Fraudulent Transfer Act is amended | ||||||
22 | by changing the title of the Act and Sections 1, 2, 3, 4, 5, 6, | ||||||
23 | 7, 8, 9, and 10 and by adding Sections 10.1, 10.2, and 14 as | ||||||
24 | follows: |
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1 | (740 ILCS 160/Act title) | ||||||
2 | An Act in relation to voidable transactions fraudulent | ||||||
3 | transfers . | ||||||
4 | (740 ILCS 160/1) (from Ch. 59, par. 101) | ||||||
5 | Sec. 1. Short title. This Act , which was formerly cited as | ||||||
6 | the Uniform Fraudulent Transfer Act, shall be known and may be | ||||||
7 | cited as the Uniform Voidable Transactions Fraudulent Transfer | ||||||
8 | Act. | ||||||
9 | (Source: P.A. 86-814.) | ||||||
10 | (740 ILCS 160/2) (from Ch. 59, par. 102) | ||||||
11 | Sec. 2. Definitions. As used in this Act: As used in this | ||||||
12 | Act: | ||||||
13 | (a) "Affiliate" means: | ||||||
14 | (1) a person that who directly or indirectly owns, | ||||||
15 | controls, or holds with power to vote, 20% or more of the | ||||||
16 | outstanding voting securities of the debtor, other than a | ||||||
17 | person that who holds the securities : , | ||||||
18 | (A) as a fiduciary or agent without sole | ||||||
19 | discretionary power to vote the securities; or | ||||||
20 | (B) solely to secure a debt, if the person has not | ||||||
21 | in fact exercised the power to vote; | ||||||
22 | (2) a corporation with 20% or more outstanding voting | ||||||
23 | securities which are directly or indirectly owned, | ||||||
24 | controlled, or held with power to vote, by the debtor or a |
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1 | person that who directly or indirectly owns, controls, or | ||||||
2 | holds with power to vote, 20% or more of the outstanding | ||||||
3 | voting securities of the debtor, other than a person that | ||||||
4 | who holds the securities : , | ||||||
5 | (A) as a fiduciary or agent without sole | ||||||
6 | discretionary power to vote the securities; or | ||||||
7 | (B) solely to secure a debt, if the person has not | ||||||
8 | in fact exercised the power to vote; | ||||||
9 | (3) a person whose business is operated by the | ||||||
10 | debtor under a lease or other agreement, or a person | ||||||
11 | substantially all of whose assets are controlled by | ||||||
12 | the debtor; or | ||||||
13 | (4) a person that who operates the debtor's business | ||||||
14 | under a lease or other agreement or controls substantially | ||||||
15 | all of the debtor's assets. | ||||||
16 | (b) "Asset" means property of a debtor, but the term does | ||||||
17 | not include: | ||||||
18 | (1) property to the extent it is encumbered by a valid | ||||||
19 | lien; | ||||||
20 | (2) property to the extent it is generally exempt | ||||||
21 | under nonbankruptcy law laws of this State ; or | ||||||
22 | (3) an interest in property held in tenancy by the | ||||||
23 | entireties to the extent it is not subject to process by a | ||||||
24 | creditor holding a claim against only one tenant. | ||||||
25 | (c) "Claim" , except as used in "claim for relief", means a | ||||||
26 | right to payment, whether or not the right is reduced to |
| |||||||
| |||||||
1 | judgment, liquidated, unliquidated, fixed, contingent, | ||||||
2 | matured, unmatured, disputed, undisputed, legal, equitable, | ||||||
3 | secured, or unsecured. | ||||||
4 | (d) "Creditor" means a person that who has a claim, | ||||||
5 | including a claim for past-due child support. | ||||||
6 | (e) "Debt" means liability on a claim. | ||||||
7 | (f) "Debtor" means a person that who is liable on a claim. | ||||||
8 | (g) "Electronic" means relating to technology having | ||||||
9 | electrical, digital, magnetic, wireless, optical, | ||||||
10 | electromagnetic, or similar capabilities. | ||||||
11 | (h) (g) "Insider" includes: | ||||||
12 | (1) if the debtor is an individual : , | ||||||
13 | (A) a relative of the debtor or of a general | ||||||
14 | partner of the debtor; | ||||||
15 | (B) a partnership in which the debtor is a general | ||||||
16 | partner; | ||||||
17 | (C) a general partner in a partnership described | ||||||
18 | in clause (B); or | ||||||
19 | (D) a corporation of which the debtor is a | ||||||
20 | director, officer, or person in control; | ||||||
21 | (2) if the debtor is a corporation : , | ||||||
22 | (A) a director of the debtor; | ||||||
23 | (B) an officer of the debtor; | ||||||
24 | (C) a person in control of the debtor; | ||||||
25 | (D) a partnership in which the debtor is a general | ||||||
26 | partner; |
| |||||||
| |||||||
1 | (E) a general partner in a partnership described | ||||||
2 | in clause (D); or | ||||||
3 | (F) a relative of a general partner, director, | ||||||
4 | officer, or person in control of the debtor; | ||||||
5 | (3) if the debtor is a partnership : , | ||||||
6 | (A) a general partner in the debtor; | ||||||
7 | (B) a relative of a general partner in, a general | ||||||
8 | partner of, or a person in control of the debtor; | ||||||
9 | (C) another partnership in which the debtor is a | ||||||
10 | general partner; | ||||||
11 | (D) a general partner in a partnership described | ||||||
12 | in clause (C); or | ||||||
13 | (E) a person in control of the debtor; | ||||||
14 | (4) an affiliate, or an insider of an affiliate as if | ||||||
15 | the affiliate were the debtor; and | ||||||
16 | (5) a managing agent of the debtor. | ||||||
17 | (i) (h) "Lien" means a charge against or an interest in | ||||||
18 | property to secure payment of a debt or performance of an | ||||||
19 | obligation, and includes a security interest created by | ||||||
20 | agreement, a judicial lien obtained by legal or equitable | ||||||
21 | process or proceedings, a common-law lien, or a statutory | ||||||
22 | lien. | ||||||
23 | (j) "Organization" means a person other than an | ||||||
24 | individual. (i) "Person" means an individual, partnership, | ||||||
25 | corporation, association, organization, government or | ||||||
26 | governmental subdivision or agency, business trust, estate, |
| |||||||
| |||||||
1 | trust, or any other legal or commercial entity. | ||||||
2 | (k) "Person" means an individual, estate, partnership, | ||||||
3 | association, trust, business or nonprofit entity, public | ||||||
4 | corporation, government or governmental subdivision, agency, | ||||||
5 | or instrumentality, or other legal or commercial entity. | ||||||
6 | (l) (j) "Property" means anything that may be the subject | ||||||
7 | of ownership. | ||||||
8 | (m) "Record" means information that is inscribed on a | ||||||
9 | tangible medium or that is stored in an electronic or other | ||||||
10 | medium and is retrievable in perceivable form. | ||||||
11 | (n) (k) "Relative" means an individual related by | ||||||
12 | consanguinity within the third degree as determined by the | ||||||
13 | common law, a spouse, or an individual related to a spouse | ||||||
14 | within the third degree as so determined, and includes an | ||||||
15 | individual in an adoptive relationship within the third | ||||||
16 | degree. | ||||||
17 | (o) "Sign" means, with present intent to authenticate or | ||||||
18 | adopt a record: | ||||||
19 | (1) to execute or adopt a tangible symbol; or | ||||||
20 | (2) to attach to or logically associate with the | ||||||
21 | record an electronic symbol, sound, or process. | ||||||
22 | (p) (l) "Transfer" means every mode, direct or indirect, | ||||||
23 | absolute or conditional, voluntary or involuntary, of | ||||||
24 | disposing of or parting with an asset or an interest in an | ||||||
25 | asset, and includes payment of money, release, lease, license, | ||||||
26 | and creation of a lien or other encumbrance. |
| |||||||
| |||||||
1 | (q) (m) "Valid lien" means a lien that is effective | ||||||
2 | against the holder of a judicial lien subsequently obtained by | ||||||
3 | legal or equitable process or proceedings. | ||||||
4 | (Source: P.A. 90-18, eff. 7-1-97.) | ||||||
5 | (740 ILCS 160/3) (from Ch. 59, par. 103) | ||||||
6 | Sec. 3. Insolvency. | ||||||
7 | (a) A debtor is insolvent if , at a fair valuation, the sum | ||||||
8 | of the debtor's debts is greater than the sum all of the | ||||||
9 | debtor's assets at a fair valuation . | ||||||
10 | (b) A debtor that who is generally not paying the debtor's | ||||||
11 | his debts as they become due other than as a result of a bona | ||||||
12 | fide dispute is presumed to be insolvent. The presumption | ||||||
13 | imposes on the party against which the presumption is directed | ||||||
14 | the burden of proving that the nonexistence of insolvency is | ||||||
15 | more probable than its existence. | ||||||
16 | (c) A partnership is insolvent under subsection (a) if the | ||||||
17 | sum of the partnership's debts is greater than the aggregate, | ||||||
18 | at a fair valuation, of all of the partnership's assets and the | ||||||
19 | sum of the excess of the value of each general partner's | ||||||
20 | nonpartnership assets over the partner's nonpartnership debts. | ||||||
21 | (c) (d) Assets under this Section do not include property | ||||||
22 | that has been transferred, concealed, or removed with intent | ||||||
23 | to hinder, delay, or defraud creditors or that has been | ||||||
24 | transferred in a manner making the transfer voidable under | ||||||
25 | this Act. |
| |||||||
| |||||||
1 | (d) (e) Debts under this Section do not include an | ||||||
2 | obligation to the extent it is secured by a valid lien on | ||||||
3 | property of the debtor not included as an asset. | ||||||
4 | (Source: P.A. 86-814.) | ||||||
5 | (740 ILCS 160/4) (from Ch. 59, par. 104) | ||||||
6 | Sec. 4. Value. | ||||||
7 | (a) Value is given for a transfer or an obligation if, in | ||||||
8 | exchange for the transfer or obligation, property is | ||||||
9 | transferred or an antecedent debt is secured or satisfied, but | ||||||
10 | value does not include an unperformed promise made otherwise | ||||||
11 | than in the ordinary course of the promisor's business to | ||||||
12 | furnish support to the debtor or another person. | ||||||
13 | (b) For the purposes of paragraph (2) of subsection (a) of | ||||||
14 | Section 5 and Section 6, a person gives a reasonably | ||||||
15 | equivalent value if the person acquires an interest of the | ||||||
16 | debtor in an asset pursuant to a regularly conducted, | ||||||
17 | noncollusive foreclosure sale or execution of a power of sale | ||||||
18 | for the acquisition or disposition of the interest of the | ||||||
19 | debtor upon default under a mortgage, deed of trust, or | ||||||
20 | security agreement. | ||||||
21 | (c) A transfer is made for present value if the exchange | ||||||
22 | between the debtor and the transferee is intended by them to be | ||||||
23 | contemporaneous and is in fact substantially contemporaneous. | ||||||
24 | (Source: P.A. 86-814.) |
| |||||||
| |||||||
1 | (740 ILCS 160/5) (from Ch. 59, par. 105) | ||||||
2 | Sec. 5. Transfer or obligation voidable as to present or | ||||||
3 | future creditor. | ||||||
4 | (a) A transfer made or obligation incurred by a debtor is | ||||||
5 | voidable fraudulent as to a creditor, whether the creditor's | ||||||
6 | claim arose before or after the transfer was made or the | ||||||
7 | obligation was incurred, if the debtor made the transfer or | ||||||
8 | incurred the obligation: | ||||||
9 | (1) with actual intent to hinder, delay, or defraud | ||||||
10 | any creditor of the debtor; or | ||||||
11 | (2) without receiving a reasonably equivalent value in | ||||||
12 | exchange for the transfer or obligation, and the debtor: | ||||||
13 | (A) was engaged or was about to engage in a | ||||||
14 | business or a transaction for which the remaining | ||||||
15 | assets of the debtor were unreasonably small in | ||||||
16 | relation to the business or transaction; or | ||||||
17 | (B) intended to incur, or believed or reasonably | ||||||
18 | should have believed that the debtor he would incur, | ||||||
19 | debts beyond the debtor's his ability to pay as they | ||||||
20 | became due. | ||||||
21 | (b) In determining actual intent under paragraph (1) of | ||||||
22 | subsection (a), consideration may be given, among other | ||||||
23 | factors, to whether: | ||||||
24 | (1) the transfer or obligation was to an insider; | ||||||
25 | (2) the debtor retained possession or control of the | ||||||
26 | property transferred after the transfer; |
| |||||||
| |||||||
1 | (3) the transfer or obligation was disclosed or | ||||||
2 | concealed; | ||||||
3 | (4) before the transfer was made or obligation was | ||||||
4 | incurred, the debtor had been sued or threatened with | ||||||
5 | suit; | ||||||
6 | (5) the transfer was of substantially all the debtor's | ||||||
7 | assets; | ||||||
8 | (6) the debtor absconded; | ||||||
9 | (7) the debtor removed or concealed assets; | ||||||
10 | (8) the value of the consideration received by the | ||||||
11 | debtor was reasonably equivalent to the value of the asset | ||||||
12 | transferred or the amount of the obligation incurred; | ||||||
13 | (9) the debtor was insolvent or became insolvent | ||||||
14 | shortly after the transfer was made or the obligation was | ||||||
15 | incurred; | ||||||
16 | (10) the transfer occurred shortly before or shortly | ||||||
17 | after a substantial debt was incurred; and | ||||||
18 | (11) the debtor transferred the essential assets of | ||||||
19 | the business to a lienor that who transferred the assets | ||||||
20 | to an insider of the debtor. | ||||||
21 | (c) A creditor making a claim for relief under subsection | ||||||
22 | (a) has the burden of proving the elements of the claim for | ||||||
23 | relief by a preponderance of the evidence. | ||||||
24 | (Source: P.A. 86-814.) | ||||||
25 | (740 ILCS 160/6) (from Ch. 59, par. 106) |
| |||||||
| |||||||
1 | Sec. 6. Transfer or obligation voidable as to present | ||||||
2 | creditor. | ||||||
3 | (a) A transfer made or obligation incurred by a debtor is | ||||||
4 | voidable fraudulent as to a creditor whose claim arose before | ||||||
5 | the transfer was made or the obligation was incurred if the | ||||||
6 | debtor made the transfer or incurred the obligation without | ||||||
7 | receiving a reasonably equivalent value in exchange for the | ||||||
8 | transfer or obligation and the debtor was insolvent at that | ||||||
9 | time or the debtor became insolvent as a result of the transfer | ||||||
10 | or obligation. | ||||||
11 | (b) A transfer made by a debtor is voidable fraudulent as | ||||||
12 | to a creditor whose claim arose before the transfer was made if | ||||||
13 | the transfer was made to an insider for an antecedent debt, the | ||||||
14 | debtor was insolvent at that time, and the insider had | ||||||
15 | reasonable cause to believe that the debtor was insolvent. | ||||||
16 | (c) Subject to subsection (b) of Section 3, a creditor | ||||||
17 | making a claim for relief under subsection (a) or (b) has the | ||||||
18 | burden of proving the elements of the claim for relief by a | ||||||
19 | preponderance of the evidence. | ||||||
20 | (Source: P.A. 86-814.) | ||||||
21 | (740 ILCS 160/7) (from Ch. 59, par. 107) | ||||||
22 | Sec. 7. When transfer is made or obligation is incurred. | ||||||
23 | For the purposes of this Act: For the purposes of this Act: | ||||||
24 | (a) a transfer is made: | ||||||
25 | (1) with respect to an asset that is real property |
| |||||||
| |||||||
1 | other than a fixture, but including the interest of a | ||||||
2 | seller or purchaser under a contract for the sale of the | ||||||
3 | asset, when the transfer is so far perfected that a | ||||||
4 | good-faith purchaser of the asset from the debtor against | ||||||
5 | which whom applicable law permits the transfer to be | ||||||
6 | perfected cannot acquire an interest in the asset that is | ||||||
7 | superior to the interest of the transferee; and | ||||||
8 | (2) with respect to an asset that is not real property | ||||||
9 | or that is a fixture, when the transfer is so far perfected | ||||||
10 | that a creditor on a simple contract cannot acquire a | ||||||
11 | judicial lien otherwise than under this Act that is | ||||||
12 | superior to the interest of the transferee; | ||||||
13 | (b) if applicable law permits the transfer to be | ||||||
14 | perfected as provided in subsection (a) and the transfer | ||||||
15 | is not so perfected before the commencement of an action | ||||||
16 | for relief under this Act, the transfer is deemed made | ||||||
17 | immediately before the commencement of the action; | ||||||
18 | (c) if applicable law does not permit the transfer to be | ||||||
19 | perfected as provided in subsection (a), the transfer is made | ||||||
20 | when it becomes effective between the debtor and the | ||||||
21 | transferee; | ||||||
22 | (d) a transfer is not made until the debtor has acquired | ||||||
23 | rights in the asset transferred; and | ||||||
24 | (e) an obligation is incurred: | ||||||
25 | (1) if oral, when it becomes effective between the | ||||||
26 | parties; or |
| |||||||
| |||||||
1 | (2) if evidenced by a record writing , when the record | ||||||
2 | signed writing executed by the obligor is delivered to or | ||||||
3 | for the benefit of the obligee. | ||||||
4 | (Source: P.A. 86-814.) | ||||||
5 | (740 ILCS 160/8) (from Ch. 59, par. 108) | ||||||
6 | Sec. 8. Remedies of creditor. | ||||||
7 | (a) In an action for relief against a transfer or | ||||||
8 | obligation under this Act, a creditor, subject to the | ||||||
9 | limitations in Section 9, may obtain: | ||||||
10 | (1) avoidance of the transfer or obligation to the | ||||||
11 | extent necessary to satisfy the creditor's claim; | ||||||
12 | (2) an attachment or other provisional remedy against | ||||||
13 | the asset transferred or other property of the transferee | ||||||
14 | if available under applicable law in accordance with the | ||||||
15 | procedure prescribed by the Code of Civil Procedure ; and | ||||||
16 | (3) subject to applicable principles of equity and in | ||||||
17 | accordance with applicable rules of civil procedure : , | ||||||
18 | (A) an injunction against further disposition by | ||||||
19 | the debtor or a transferee, or both, of the asset | ||||||
20 | transferred or of other property; | ||||||
21 | (B) appointment of a receiver to take charge of | ||||||
22 | the asset transferred or of other property of the | ||||||
23 | transferee; or | ||||||
24 | (C) any other relief the circumstances may | ||||||
25 | require. |
| |||||||
| |||||||
1 | (b) If a creditor has obtained a judgment on a claim | ||||||
2 | against the debtor, the creditor, if the court so orders, may | ||||||
3 | levy execution on the asset transferred or its proceeds. | ||||||
4 | (Source: P.A. 86-814.) | ||||||
5 | (740 ILCS 160/9) (from Ch. 59, par. 109) | ||||||
6 | Sec. 9. Defenses, liability, and protection of transferee | ||||||
7 | or obligee. | ||||||
8 | (a) A transfer or obligation is not voidable under | ||||||
9 | paragraph (1) of subsection (a) of Section 5 against a person | ||||||
10 | that who took in good faith and for a reasonably equivalent | ||||||
11 | value given the debtor or against any subsequent transferee or | ||||||
12 | obligee. | ||||||
13 | (b) To the extent a transfer is avoidable in an action by a | ||||||
14 | creditor under paragraph (1) of subsection (a) of Section 8, | ||||||
15 | the following rules apply: | ||||||
16 | (1) Except as otherwise provided in this Section, to | ||||||
17 | the extent a transfer is voidable in an action by a | ||||||
18 | creditor under paragraph (1) of subsection (a) of Section | ||||||
19 | 8, the creditor may recover judgment judgement for the | ||||||
20 | value of the asset transferred, as adjusted under | ||||||
21 | subsection (c), or the amount necessary to satisfy the | ||||||
22 | creditor's claim, whichever is less. The judgment may be | ||||||
23 | entered against: | ||||||
24 | (A) (1) the first transferee of the asset or the | ||||||
25 | person for whose benefit the transfer was made; or |
| |||||||
| |||||||
1 | (B) an immediate or mediate transferee of the | ||||||
2 | first transferee, other than: (2) any subsequent | ||||||
3 | transferee other than | ||||||
4 | (i) a good-faith transferee that who took for | ||||||
5 | value ; or or from any subsequent transferee. | ||||||
6 | (ii) an immediate or mediate good-faith | ||||||
7 | transferee of a person described in item (i). | ||||||
8 | (2) Recovery pursuant to paragraph (1) of subsection | ||||||
9 | (a) or subsection (b) of Section 8 of or from the asset | ||||||
10 | transferred or its proceeds, by levy or otherwise, is | ||||||
11 | available only against a person described in subparagraph | ||||||
12 | (A) or (B) of paragraph (1). | ||||||
13 | (c) If the judgment under subsection (b) is based upon the | ||||||
14 | value of the asset transferred, the judgment must be for an | ||||||
15 | amount equal to the value of the asset at the time of the | ||||||
16 | transfer, subject to adjustment as the equities may require. | ||||||
17 | (d) Notwithstanding voidability of a transfer or an | ||||||
18 | obligation under this Act, a good-faith transferee or obligee | ||||||
19 | is entitled, to the extent of the value given the debtor for | ||||||
20 | the transfer or obligation, to : | ||||||
21 | (1) a lien on or a right to retain an any interest in | ||||||
22 | the asset transferred; | ||||||
23 | (2) enforcement of an any obligation incurred; or | ||||||
24 | (3) a reduction in the amount of the liability on the | ||||||
25 | judgment. | ||||||
26 | (e) A transfer is not voidable under paragraph (2) of |
| |||||||
| |||||||
1 | subsection (a) of Section 5 or Section 6 if the transfer | ||||||
2 | results from: | ||||||
3 | (1) termination of a lease upon default by the debtor | ||||||
4 | when the termination is pursuant to the lease and | ||||||
5 | applicable law; or | ||||||
6 | (2) enforcement of a security interest in compliance | ||||||
7 | with Article 9 of the Uniform Commercial Code , other than | ||||||
8 | acceptance of collateral in full or partial satisfaction | ||||||
9 | of the obligation it secures . | ||||||
10 | (f) A transfer is not voidable under subsection (b) of | ||||||
11 | Section 6: | ||||||
12 | (1) to the extent the insider gave new value to or for | ||||||
13 | the benefit of the debtor after the transfer was made , | ||||||
14 | except to the extent unless the new value was secured by a | ||||||
15 | valid lien; | ||||||
16 | (2) if made in the ordinary course of business or | ||||||
17 | financial affairs of the debtor and the insider; or | ||||||
18 | (3) if made pursuant to a good-faith effort to | ||||||
19 | rehabilitate the debtor and the transfer secured present | ||||||
20 | value given for that purpose as well as an antecedent debt | ||||||
21 | of the debtor. | ||||||
22 | (g) The following rules determine the burden of proving | ||||||
23 | matters referred to in this Section: | ||||||
24 | (1) A party that seeks to invoke subsection (a), (d), | ||||||
25 | (e), or (f) has the burden of proving the applicability of | ||||||
26 | that subsection. |
| |||||||
| |||||||
1 | (2) Except as otherwise provided in paragraphs (3) and | ||||||
2 | (4), the creditor has the burden of proving each | ||||||
3 | applicable element of subsection (b) or (c). | ||||||
4 | (3) The transferee has the burden of proving the | ||||||
5 | applicability to the transferee of item (i) or (ii) of | ||||||
6 | subparagraph (B) of paragraph (1) of subsection (b). | ||||||
7 | (4) A party that seeks adjustment under subsection (c) | ||||||
8 | has the burden of proving the adjustment. | ||||||
9 | (h) The standard of proof required to establish matters | ||||||
10 | referred to in this Section is preponderance of the evidence. | ||||||
11 | (Source: P.A. 86-814.) | ||||||
12 | (740 ILCS 160/10) (from Ch. 59, par. 110) | ||||||
13 | Sec. 10. Extinguishment of claim for relief. A claim for | ||||||
14 | relief cause of action with respect to a fraudulent transfer | ||||||
15 | or obligation under this Act is extinguished unless action is | ||||||
16 | brought: | ||||||
17 | (a) under paragraph (1) of subsection (a) of Section | ||||||
18 | 5, not later than within 4 years after the transfer was | ||||||
19 | made or the obligation was incurred or, if later, not | ||||||
20 | later than within one year after the transfer or | ||||||
21 | obligation was or could reasonably have been discovered by | ||||||
22 | the claimant; | ||||||
23 | (b) under paragraph (2) of subsection (a) of Section 5 | ||||||
24 | or subsection (a) of Section 6, not later than within 4 | ||||||
25 | years after the transfer was made or the obligation was |
| |||||||
| |||||||
1 | incurred; or | ||||||
2 | (c) under subsection (b) of Section 6, not later than | ||||||
3 | within one year after the transfer was made or the | ||||||
4 | obligation was incurred . | ||||||
5 | (Source: P.A. 86-814.) | ||||||
6 | (740 ILCS 160/10.1 new) | ||||||
7 | Sec. 10.1. Governing law. | ||||||
8 | (a) In this Section, the following rules determine a | ||||||
9 | debtor's location: | ||||||
10 | (1) A debtor who is an individual is located at the | ||||||
11 | individual's principal residence. | ||||||
12 | (2) A debtor that is an organization and has only one | ||||||
13 | place of business is located at its place of business. | ||||||
14 | (3) A debtor that is an organization and has more than | ||||||
15 | one place of business is located at its chief executive | ||||||
16 | office. | ||||||
17 | (b) A claim for relief in the nature of a claim for relief | ||||||
18 | under this Act is governed by the local law of the jurisdiction | ||||||
19 | in which the debtor is located when the transfer is made or the | ||||||
20 | obligation is incurred. | ||||||
21 | (740 ILCS 160/10.2 new) | ||||||
22 | Sec. 10.2. Application to series organization. | ||||||
23 | (a) In this Section: | ||||||
24 | (1) "Protected series" means an arrangement, however |
| |||||||
| |||||||
1 | denominated, created by a series organization that, | ||||||
2 | pursuant to the law under which the series organization is | ||||||
3 | organized, has the characteristics set forth in paragraph | ||||||
4 | (2). | ||||||
5 | (2) "Series organization" means an organization that, | ||||||
6 | pursuant to the law under which it is organized, has the | ||||||
7 | following characteristics: | ||||||
8 | (A) The organic record of the organization | ||||||
9 | provides for creation by the organization of one or | ||||||
10 | more protected series, however denominated, with | ||||||
11 | respect to specified property of the organization, and | ||||||
12 | for records to be maintained for each protected series | ||||||
13 | that identify the property of or associated with the | ||||||
14 | protected series. | ||||||
15 | (B) Debt incurred or existing with respect to the | ||||||
16 | activities of, or property of or associated with, a | ||||||
17 | particular protected series is enforceable against the | ||||||
18 | property of or associated with the protected series | ||||||
19 | only, and not against the property of or associated | ||||||
20 | with the organization or other protected series of the | ||||||
21 | organization. | ||||||
22 | (C) Debt incurred or existing with respect to the | ||||||
23 | activities or property of the organization is | ||||||
24 | enforceable against the property of the organization | ||||||
25 | only, and not against the property of or associated | ||||||
26 | with a protected series of the organization. |
| |||||||
| |||||||
1 | (b) A series organization and each protected series of the | ||||||
2 | organization is a separate person for purposes of this Act, | ||||||
3 | even if for other purposes a protected series is not a person | ||||||
4 | separate from the organization or other protected series of | ||||||
5 | the organization. | ||||||
6 | (740 ILCS 160/14 new) | ||||||
7 | Sec. 14. Relation to the Electronic Signatures in Global | ||||||
8 | and National Commerce Act. This Act modifies, limits, or | ||||||
9 | supersedes the Electronic Signatures in Global and National | ||||||
10 | Commerce Act, 15 U.S.C. Section 7001 et seq., but does not | ||||||
11 | modify, limit, or supersede Section 101(c) of that Act, 15 | ||||||
12 | U.S.C. Section 7001(c), or authorize electronic delivery of | ||||||
13 | any of the notices described in Section 103(b) of that Act, 15 | ||||||
14 | U.S.C. Section 7003(b). | ||||||
15 | Section 15. The Illinois Trust Code is amended by changing | ||||||
16 | Sections 1332 and 1335 as follows: | ||||||
17 | (760 ILCS 3/1332) | ||||||
18 | Sec. 1332. Creditor claim: general power created by | ||||||
19 | powerholder. | ||||||
20 | (a) In this Section, "power of appointment created by the | ||||||
21 | powerholder" includes a power of appointment created in a | ||||||
22 | transfer by another person to the extent the powerholder | ||||||
23 | contributed value to the transfer. |
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1 | (b) Appointive property subject to a general power of | ||||||
2 | appointment created by the powerholder is subject to a claim | ||||||
3 | of a creditor of the powerholder or of the powerholder's | ||||||
4 | estate to the extent provided in the Uniform Voidable | ||||||
5 | Transactions Fraudulent Transfer Act. | ||||||
6 | (c) Subject to subsection (b), appointive property subject | ||||||
7 | to a general power of appointment created by the powerholder | ||||||
8 | is not subject to a claim of a creditor of the powerholder or | ||||||
9 | the powerholder's estate to the extent the powerholder | ||||||
10 | irrevocably appointed the property in favor of a person other | ||||||
11 | than the powerholder or the powerholder's estate. | ||||||
12 | (d) Subject to subsections (b) and (c), and | ||||||
13 | notwithstanding the presence of a spendthrift provision or | ||||||
14 | whether the claim arose before or after the creation of the | ||||||
15 | power of appointment, appointive property subject to a general | ||||||
16 | power of appointment created by the powerholder is subject to | ||||||
17 | a claim of a creditor of: | ||||||
18 | (1) the powerholder, to the same extent as if the | ||||||
19 | powerholder owned the appointive property, if the power is | ||||||
20 | presently exercisable; and | ||||||
21 | (2) the powerholder's estate, to the extent the estate | ||||||
22 | is insufficient to satisfy the claim and subject to the | ||||||
23 | right of a decedent to direct the source from which | ||||||
24 | liabilities are paid, if the power is exercisable at the | ||||||
25 | powerholder's death. | ||||||
26 | (Source: P.A. 101-48, eff. 1-1-20 .) |
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1 | (760 ILCS 3/1335) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Sec. 1335. Creditor claim: nongeneral power. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | (a) Except as otherwise provided in subsections (b) and | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | (c), appointive property subject to a nongeneral power of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | appointment is exempt from a claim of a creditor of the | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6 | powerholder or the powerholder's estate. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7 | (b) Appointive property subject to a nongeneral power of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8 | appointment is subject to a claim of a creditor of the | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
9 | powerholder or the powerholder's estate to the extent that the | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10 | powerholder owned the property and, reserving the nongeneral | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
11 | power, transferred the property in violation of the Uniform | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
12 | Voidable Transactions Fraudulent Transfer Act. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
13 | (c) If the initial gift in default of appointment is to the | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
14 | powerholder or the powerholder's estate, a nongeneral power of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
15 | appointment is treated for purposes of this Section as a | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
16 | general power. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
17 | (Source: P.A. 101-48, eff. 1-1-20 .) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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