Bill Text: NY A05622 | 2019-2020 | General Assembly | Introduced
Bill Title: Enacts the uniform voidable transactions act and repeals provisions relating to fraudulent conveyances.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Passed) 2019-12-06 - signed chap.580 [A05622 Detail]
Download: New_York-2019-A05622-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 5622 2019-2020 Regular Sessions IN ASSEMBLY February 14, 2019 ___________ Introduced by M. of A. WEINSTEIN, TAYLOR -- read once and referred to the Committee on Judiciary AN ACT to amend the debtor and creditor law, the civil practice law and rules, the estates, powers and trusts law and the workers' compen- sation law, in relation to enacting the "uniform voidable transactions act"; and to repeal certain provisions of the debtor and creditor law relating to fraudulent conveyances The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Short title. This act shall be known and may be cited as 2 the "uniform voidable transactions act". 3 § 2. Article 10 of the debtor and creditor law is REPEALED and a new 4 article 10 is added to read as follows: 5 ARTICLE 10 6 UNIFORM VOIDABLE TRANSACTIONS ACT 7 Section 270. Definitions. 8 271. Insolvency. 9 272. Value. 10 273. Transfer or obligation voidable as to present or future 11 creditor. 12 274. Transfer or obligation voidable as to present creditor. 13 275. When transfer is made or obligation is incurred. 14 276. Remedies of creditor. 15 276-a. Attorney's fees in action or special proceeding under 16 this article to avoid a transfer or obligation. 17 277. Defenses, liability, and protection of transferee or 18 obligee. 19 278. Extinguishment of claim for relief. 20 279. Governing law. 21 280. Supplementary provisions. 22 281. Uniformity of application and construction. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD00878-01-9A. 5622 2 1 281-a. Relation to electronic signatures in global and national 2 commerce act. 3 § 270. Definitions. As used in this article: 4 (a) "Affiliate" means: 5 (1) a person that directly or indirectly owns, controls or holds with 6 power to vote, twenty percent or more of the outstanding voting securi- 7 ties of the debtor, other than a person that holds the securities: 8 (i) as a fiduciary or agent without sole discretionary power to vote 9 the securities; or 10 (ii) solely to secure a debt, if the person has not in fact exercised 11 the power to vote; 12 (2) a corporation twenty percent or more of whose outstanding voting 13 securities are directly or indirectly owned, controlled or held with 14 power to vote, by the debtor or a person that directly or indirectly 15 owns, controls or holds, with power to vote, twenty percent or more of 16 the outstanding voting securities of the debtor, other than a person 17 that holds the securities: 18 (i) as a fiduciary or agent without sole discretionary power to vote 19 the securities; or 20 (ii) solely to secure a debt, if the person has not in fact exercised 21 the power to vote; 22 (3) a person whose business is operated by the debtor under a lease or 23 other agreement, or a person substantially all of whose assets are 24 controlled by the debtor; or 25 (4) a person that operates the debtor's business under a lease or 26 other agreement or controls substantially all of the debtor's assets. 27 (b) "Asset" means property of a debtor, but the term does not include: 28 (1) property to the extent it is encumbered by a valid lien; 29 (2) property to the extent it is generally exempt under non-bankruptcy 30 law; or 31 (3) an interest in property held in tenancy by the entirety to the 32 extent it is not subject to process by a creditor holding a claim 33 against only one tenant. 34 (c) "Claim", except as used in "claim for relief", means a right to 35 payment, whether or not the right is reduced to judgment, liquidated, 36 unliquidated, fixed, contingent, matured, unmatured, disputed, undis- 37 puted, legal, equitable, secured or unsecured. 38 (d) "Creditor" means a person that has a claim. 39 (e) "Debt" means liability on a claim. 40 (f) "Debtor" means a person that is liable on a claim. 41 (g) "Electronic" means relating to technology having electrical, 42 digital, magnetic, wireless, optical, electromagnetic or similar capa- 43 bilities. 44 (h) "Insider" includes: 45 (1) if the debtor is an individual: 46 (i) a relative of the debtor or of a general partner of the debtor; 47 (ii) a partnership in which the debtor is a general partner; 48 (iii) a general partner in a partnership described in subparagraph 49 (ii) of this paragraph; or 50 (iv) a corporation of which the debtor is a director, officer, or 51 person in control; 52 (2) if the debtor is a corporation: 53 (i) a director of the debtor; 54 (ii) an officer of the debtor; 55 (iii) a person in control of the debtor; 56 (iv) a partnership in which the debtor is a general partner;A. 5622 3 1 (v) a general partner in a partnership described in subparagraph (iv) 2 of this paragraph; or 3 (vi) a relative of a general partner, director, officer or person in 4 control of the debtor; 5 (3) if the debtor is a partnership: 6 (i) a general partner in the debtor; 7 (ii) a relative of a general partner in, a general partner of or a 8 person in control of the debtor; 9 (iii) another partnership in which the debtor is a general partner; 10 (iv) a general partner in a partnership described in subparagraph 11 (iii) of this paragraph; or 12 (v) a person in control of the debtor; 13 (4) an affiliate, or an insider of an affiliate as if the affiliate 14 were the debtor; and 15 (5) a managing agent of the debtor. 16 (i) "Lien" means a charge against or an interest in property to secure 17 payment of a debt or performance of an obligation, and includes a secu- 18 rity interest created by agreement, a judicial lien obtained by legal or 19 equitable process or proceedings, a common-law lien, or a statutory 20 lien. 21 (j) "Organization" means a person other than an individual. 22 (k) "Person" means an individual, estate, partnership, association, 23 trust, business or nonprofit entity, public corporation, government or 24 governmental subdivision, agency or instrumentality, or other legal or 25 commercial entity. 26 (l) "Property" means anything that may be the subject of ownership. 27 (m) "Record" means information that is inscribed on a tangible medium 28 or that is stored in an electronic or other medium and is retrievable in 29 perceivable form. 30 (n) "Relative" means an individual related by consanguinity within the 31 third degree as determined by the common law, a spouse or an individual 32 related to a spouse within the third degree as so determined, and 33 includes an individual in an adoptive relationship within the third 34 degree. 35 (o) "Sign" means, with present intent to authenticate or adopt a 36 record: 37 (i) to execute or adopt a tangible symbol; or 38 (ii) to attach to or logically associate with the record an electronic 39 symbol, sound, or process. 40 (p) "Transfer" means every mode, direct or indirect, absolute or 41 conditional, voluntary or involuntary, of disposing of or parting with 42 an asset or an interest in an asset, and includes payment of money, 43 release, lease, license, and creation of a lien or other encumbrance. 44 (q) "Valid lien" means a lien that is effective against the holder of 45 a judicial lien subsequently obtained by legal or equitable process or 46 proceedings. 47 § 271. Insolvency. (a) A debtor is insolvent if, at a fair valuation, 48 the sum of the debtor's debts is greater than the sum of the debtor's 49 assets. 50 (b) A debtor that is generally not paying the debtor's debts as they 51 become due other than as a result of a bona fide dispute is presumed to 52 be insolvent. The presumption imposes on the party against which the 53 presumption is directed the burden of proving that the nonexistence of 54 insolvency is more probable than its existence. 55 (c) Assets under this section do not include property that has been 56 transferred, concealed or removed with intent to hinder, delay orA. 5622 4 1 defraud creditors, or that has been transferred in a manner making the 2 transfer voidable under this article. 3 (d) Debts under this section do not include an obligation to the 4 extent it is secured by a valid lien on property of the debtor not 5 included as an asset. 6 § 272. Value. (a) Value is given for a transfer or an obligation if, 7 in exchange for the transfer or obligation, property is transferred or 8 an antecedent debt is secured or satisfied, but value does not include 9 an unperformed promise made otherwise than in the ordinary course of the 10 promisor's business to furnish support to the debtor or another person. 11 (b) For the purposes of paragraph two of subdivision (a) of section 12 two hundred seventy-three and section two hundred seventy-four of this 13 article, a person gives a reasonably equivalent value if the person 14 acquires an interest of the debtor in an asset pursuant to a regularly 15 conducted, noncollusive foreclosure sale or execution of a power of sale 16 for the acquisition or disposition of the interest of the debtor upon 17 default under a mortgage, deed of trust, or security agreement. 18 (c) A transfer is made for present value if the exchange between the 19 debtor and the transferee is intended by them to be contemporaneous and 20 is in fact substantially contemporaneous. 21 § 273. Transfer or obligation voidable as to present or future credi- 22 tor. (a) A transfer made or obligation incurred by a debtor is voidable 23 as to a creditor, whether the creditor's claim arose before or after the 24 transfer was made or the obligation was incurred, if the debtor made the 25 transfer or incurred the obligation: 26 (1) with actual intent to hinder, delay or defraud any creditor of the 27 debtor; or 28 (2) without receiving a reasonably equivalent value in exchange for 29 the transfer or obligation, and the debtor: 30 (i) was engaged or was about to engage in a business or a transaction 31 for which the remaining assets of the debtor were unreasonably small in 32 relation to the business or transaction; or 33 (ii) intended to incur, or believed or reasonably should have believed 34 that the debtor would incur, debts beyond the debtor's ability to pay as 35 they became due. 36 (b) In determining actual intent under paragraph one of subdivision 37 (a) of this section, consideration may be given, among other factors, to 38 whether: 39 (1) the transfer or obligation was to an insider; 40 (2) the debtor retained possession or control of the property trans- 41 ferred after the transfer; 42 (3) the transfer or obligation was disclosed or concealed; 43 (4) before the transfer was made or obligation was incurred, the 44 debtor had been sued or threatened with suit; 45 (5) the transfer was of substantially all the debtor's assets; 46 (6) the debtor absconded; 47 (7) the debtor removed or concealed assets; 48 (8) the value of the consideration received by the debtor was reason- 49 ably equivalent to the value of the asset transferred or the amount of 50 the obligation incurred; 51 (9) the debtor was insolvent or became insolvent shortly after the 52 transfer was made or the obligation was incurred; 53 (10) the transfer occurred shortly before or shortly after a substan- 54 tial debt was incurred; and 55 (11) the debtor transferred the essential assets of the business to a 56 lienor that transferred the assets to an insider of the debtor.A. 5622 5 1 (c) A creditor making a claim for relief under subdivision (a) of this 2 section has the burden of proving the elements of the claim for relief 3 by a preponderance of the evidence. 4 § 274. Transfer or obligation voidable as to present creditor. (a) A 5 transfer made or obligation incurred by a debtor is voidable as to a 6 creditor whose claim arose before the transfer was made or the obli- 7 gation was incurred if the debtor made the transfer or incurred the 8 obligation without receiving a reasonably equivalent value in exchange 9 for the transfer or obligation and the debtor was insolvent at that time 10 or the debtor became insolvent as a result of the transfer or obli- 11 gation. 12 (b) A transfer made by a debtor is voidable as to a creditor whose 13 claim arose before the transfer was made if the transfer was made to an 14 insider for an antecedent debt, the debtor was insolvent at that time, 15 and the insider had reasonable cause to believe that the debtor was 16 insolvent. 17 (c) Subject to subdivision (b) of section two hundred seventy-one of 18 this article, a creditor making a claim for relief under subdivision (a) 19 or (b) of this section has the burden of proving the elements of the 20 claim for relief by a preponderance of the evidence. 21 § 275. When transfer is made or obligation is incurred. For the 22 purposes of this article: 23 (a) a transfer is made: 24 (1) with respect to an asset that is real property other than a 25 fixture, but including the interest of a seller or purchaser under a 26 contract for the sale of the asset, when the transfer is so far 27 perfected that a good-faith purchaser of the asset from the debtor 28 against which applicable law permits the transfer to be perfected cannot 29 acquire an interest in the asset that is superior to the interest of the 30 transferee; and 31 (2) with respect to an asset that is not real property or that is a 32 fixture, when the transfer is so far perfected that a creditor on a 33 simple contract cannot acquire a judicial lien otherwise than under this 34 article that is superior to the interest of the transferee; 35 (b) if applicable law permits the transfer to be perfected as provided 36 in subdivision (a) of this section and the transfer is not so perfected 37 before the commencement of an action for relief under this article, the 38 transfer is deemed made immediately before the commencement of the 39 action; 40 (c) if applicable law does not permit the transfer to be perfected as 41 provided in subdivision (a) of this section, the transfer is made when 42 it becomes effective between the debtor and the transferee; 43 (d) a transfer is not made until the debtor has acquired rights in the 44 asset transferred; and 45 (e) an obligation is incurred: 46 (1) if oral, when it becomes effective between the parties; or 47 (2) if evidenced by a record, when the record signed by the obligor is 48 delivered to or for the benefit of the obligee. 49 § 276. Remedies of creditor. (a) In an action for relief against a 50 transfer or obligation under this article, a creditor, subject to the 51 limitations in section two hundred seventy-seven of this article, may 52 obtain: 53 (1) avoidance of the transfer or obligation to the extent necessary to 54 satisfy the creditor's claim;A. 5622 6 1 (2) an attachment or other provisional remedy against the asset trans- 2 ferred or other property of the transferee if available under applicable 3 law; and 4 (3) subject to applicable principles of equity and in accordance with 5 applicable rules of civil procedure: 6 (i) an injunction against further disposition by the debtor or a 7 transferee, or both, of the asset transferred or of other property; 8 (ii) appointment of a receiver to take charge of the asset transferred 9 or of other property of the transferee; or 10 (iii) any other relief the circumstances may require. 11 (b) If a creditor has obtained a judgment on a claim against the 12 debtor, the creditor, if the court so orders, may levy execution on the 13 asset transferred or its proceeds. 14 § 276-a. Attorney's fees in action or special proceeding under this 15 article to avoid a transfer or obligation. In an action or special 16 proceeding under this article in which a judgment creditor who has been 17 awarded by court order or agreement or has waived attorney's fees avail- 18 able to prevailing parties by the terms of the statute under which the 19 creditor's underlying claim arose, or representative asserting the 20 rights of such judgment creditor, recovers judgment avoiding any trans- 21 fer or obligation, the justice or surrogate presiding at the trial shall 22 fix the reasonable attorney's fees of the creditor, or creditor repre- 23 sentative, incurred in such action or special proceeding under this 24 article as an additional amount required to satisfy the creditor's 25 claim, and the creditor, or creditor representative, shall have judgment 26 therefor against the debtor and, subject to the defenses and protections 27 in section two hundred seventy-seven of this article, against any trans- 28 feree (or person for whose benefit the transfer was made) against whom 29 relief is ordered, in addition to the other relief granted by the judg- 30 ment. The fee so fixed shall be without regard, or prejudice, to any 31 agreement, express or implied, between the creditor, or the creditor 32 representative, and his or her attorney with respect to the compensation 33 of such attorney. 34 § 277. Defenses, liability, and protection of transferee or obligee. 35 (a) A transfer or obligation is not voidable under paragraph one of 36 subdivision (a) of section two hundred seventy-three of this article 37 against a person that took in good faith and for a reasonably equivalent 38 value given the debtor or against any subsequent transferee or obligee. 39 (b) To the extent a transfer is avoidable in an action by a creditor 40 under paragraph one of subdivision (a) of section two hundred seventy- 41 six of this article the following rules apply: 42 (1) Except as otherwise provided in this section, the creditor may 43 recover judgment for the value of the asset transferred, as adjusted 44 under subdivision (c) of this section, or the amount necessary to satis- 45 fy the creditor's claim, whichever is less. The judgment may be entered 46 against: 47 (i) the first transferee of the asset or the person for whose benefit 48 the transfer was made; or 49 (ii) an immediate or mediate transferee of the first transferee, other 50 than: 51 (A) a good-faith transferee that took for value; or 52 (B) an immediate or mediate good-faith transferee of a person 53 described in clause (A) of this subparagraph. 54 (2) Recovery pursuant to paragraph one of subdivision (a) or subdivi- 55 sion (b) of section two hundred seventy-six of this article of or from 56 the asset transferred or its proceeds, by levy or otherwise, is avail-A. 5622 7 1 able only against a person described in subparagraph (i) or (ii) of 2 paragraph one of this subdivision. 3 (c) If the judgment under subdivision (b) of this section is based 4 upon the value of the asset transferred, the judgment must be for an 5 amount equal to the value of the asset at the time of the transfer, 6 subject to adjustment as the equities may require. 7 (d) Notwithstanding voidability of a transfer or an obligation under 8 this article, a good-faith transferee or obligee is entitled, to the 9 extent of the value given the debtor for the transfer or obligation, to: 10 (1) a lien on or a right to retain an interest in the asset trans- 11 ferred; 12 (2) enforcement of an obligation incurred; or 13 (3) a reduction in the amount of the liability on the judgment. 14 (e) A transfer is not voidable under paragraph two of subdivision (a) 15 of section two hundred seventy-three or section two hundred seventy-four 16 of this article if the transfer results from: 17 (1) termination of a lease upon default by the debtor when the termi- 18 nation is pursuant to the lease and applicable law; or 19 (2) enforcement of a security interest in compliance with article nine 20 of the uniform commercial code, other than acceptance of collateral in 21 full or partial satisfaction of the obligation it secures. 22 (f) A transfer is not voidable under subdivision (b) of section two 23 hundred seventy-four of this article: 24 (1) to the extent the insider gave new value to or for the benefit of 25 the debtor after the transfer was made, except to the extent the new 26 value was secured by a valid lien; 27 (2) if made in the ordinary course of business or financial affairs of 28 the debtor and the insider; or 29 (3) if made pursuant to a good-faith effort to rehabilitate the debtor 30 and the transfer secured present value given for that purpose as well as 31 an antecedent debt of the debtor. 32 (g) The following rules determine the burden of proving matters 33 referred to in this section: 34 (1) A party that seeks to invoke subdivision (a), (d), (e) or (f) of 35 this section has the burden of proving the applicability of that subdi- 36 vision. 37 (2) Except as otherwise provided in paragraphs three and four of this 38 subdivision, the creditor has the burden of proving each applicable 39 element of subdivision (b) or (c) of this section. 40 (3) The transferee has the burden of proving the applicability to the 41 transferee of clause (A) or (B) of subparagraph (ii) of paragraph one of 42 subdivision (b) of this section. 43 (4) A party that seeks adjustment under subdivision (c) of this 44 section has the burden of proving the adjustment. 45 (h) The standard of proof required to establish matters referred to in 46 this section is preponderance of the evidence. 47 § 278. Extinguishment of claim for relief. A claim for relief with 48 respect to a transfer or obligation under this article is extinguished 49 unless action is brought: 50 (a) under paragraph one of subdivision (a) of section two hundred 51 seventy-three of this article, not later than four years after the 52 transfer was made or the obligation was incurred or, if later, not later 53 than one year after the transfer or obligation was or could reasonably 54 have been discovered by the claimant; 55 (b) under paragraph two of subdivision (a) of section two hundred 56 seventy-three or subdivision (a) of section two hundred seventy-four ofA. 5622 8 1 this article, not later than four years after the transfer was made or 2 the obligation was incurred; or 3 (c) under subdivision (b) of section two hundred seventy-four of this 4 article, not later than one year after the transfer was made. 5 § 279. Governing law. (a) In this section, the following rules deter- 6 mine a debtor's location: 7 (1) A debtor who is an individual is located at the individual's prin- 8 cipal residence. 9 (2) A debtor that is an organization and has only one place of busi- 10 ness is located at its place of business. 11 (3) A debtor that is an organization and has more than one place of 12 business is located at its chief executive office. 13 (b) A claim for relief in the nature of a claim for relief under this 14 article is governed by the local law of the jurisdiction in which the 15 debtor is located when the transfer is made or the obligation is 16 incurred. 17 § 280. Supplementary provisions. Unless displaced by the provisions of 18 this article, the principles of law and equity, including the law 19 merchant and the law relating to principal and agent, estoppel, laches, 20 fraud, misrepresentation, duress, coercion, mistake, insolvency, or 21 other validating or invalidating cause, supplement its provisions. 22 § 281. Uniformity of application and construction. This article shall 23 be applied and construed to effectuate its general purpose to make 24 uniform the law with respect to the subject of this article among states 25 enacting it. 26 § 281-a. Relation to electronic signatures in global and national 27 commerce act. This article modifies, limits, or supersedes the Electron- 28 ic Signatures in Global and National Commerce Act, 15 U.S.C. Section 29 7001 et seq., but does not modify, limit, or supersede Section 101(c) of 30 that act, 15 U.S.C. Section 7001(c), or authorize electronic delivery of 31 any of the notices described in Section 103(b) of that act, 15 U.S.C. 32 Section 7003(b). 33 § 3. Paragraph 5 of subdivision (c) of section 5205 of the civil prac- 34 tice law and rules, as amended by chapter 93 of the laws of 1995, is 35 amended to read as follows: 36 5. Additions to an asset described in paragraph two of this subdivi- 37 sion shall not be exempt from application to the satisfaction of a money 38 judgment if (i) made after the date that is ninety days before the 39 interposition of the claim on which such judgment was entered, or (ii) 40 deemed to be [fraudulent conveyances] voidable transactions under arti- 41 cle ten of the debtor and creditor law. 42 § 4. Subdivision (g) of section 5519 of the civil practice law and 43 rules, as added by chapter 184 of the laws of 1988, is amended to read 44 as follows: 45 (g) Appeals in medical, dental or podiatric malpractice judgments. In 46 an action for medical, dental or podiatric malpractice, if an appeal is 47 taken from a judgment in excess of one million dollars and an undertak- 48 ing in the amount of one million dollars or the limit of insurance 49 coverage available to the appellant for the occurrence, whichever is 50 greater, is given together with a joint undertaking by the appellant and 51 any insurer of the appellant's professional liability that, during the 52 period of such stay, the appellant will make no [fraudulent conveyance53without fair consideration] voidable transaction as described in 54 [section two hundred seventy-three-a] article ten of the debtor and 55 creditor law, the court to which such an appeal is taken shall stay all 56 proceedings to enforce the judgment pending such appeal if it finds thatA. 5622 9 1 there is a reasonable probability that the judgment may be reversed or 2 determined excessive. In making a determination under this subdivision, 3 the court shall not consider the availability of a stay pursuant to 4 subdivision (a) or (b) of this section. Liability under such joint 5 undertaking shall be limited to [fraudulent conveyances] voidable trans- 6 actions made by the appellant subsequent to the execution of such under- 7 taking and during the period of such stay, but nothing herein shall 8 limit the liability of the appellant for [fraudulent conveyances] voida- 9 ble transactions pursuant to article ten of the debtor and creditor law 10 or any other law. An insurer that pays money to a beneficiary of such a 11 joint undertaking shall thereupon be subrogated, to the extent of the 12 amount to be paid, to the rights and interests of such beneficiary, as a 13 judgment creditor, against the appellant on whose behalf the joint 14 undertaking was executed. 15 § 5. Subparagraph 4 of paragraph (b) of section 7-3.1 of the estates, 16 powers and trusts law, as amended by chapter 206 of the laws of 1998, is 17 amended to read as follows: 18 (4) Additions to an asset described in subparagraph one of this para- 19 graph shall not be exempt from application to the satisfaction of a 20 money judgment if (i) made after the date that is ninety days before the 21 interposition of the claim on which such judgment was entered, or (ii) 22 deemed to be [fraudulent conveyances] voidable transactions under arti- 23 cle ten of the debtor and creditor law. 24 § 6. Paragraph 3 of subdivision 3-a of section 50 of the workers' 25 compensation law, as amended by chapter 139 of the laws of 2008, is 26 amended to read as follows: 27 (3) A member's participation in a group self-insurer shall not relieve 28 it of its liability for compensation prescribed by this chapter except 29 by the payment thereof by the group self-insurer or by itself. Each 30 member shall be responsible, jointly and severally, for all liabilities 31 of the group self-insurer provided for by this chapter occurring during 32 its respective period of membership, and such liability shall attach to 33 any recipient of a conveyance of assets made in violation of subdivision 34 (a) of section two hundred [seventy-three] seventy-four of the debtor 35 and creditor law. As between the employee and the group self-insurer, 36 notice to or knowledge of the occurrence of the injury on the part of 37 the member shall be deemed notice or knowledge, as the case may be, on 38 the part of the group self-insurer; jurisdiction of the member shall, 39 for the purpose of this chapter, be jurisdiction of the group self-in- 40 surer and such group self-insurer shall in all things be bound by and 41 subject to the orders, findings, decisions or awards rendered against 42 the participating member for the payment of compensation under the 43 provisions of this chapter. The insolvency or bankruptcy of a partic- 44 ipating member shall not relieve the group self-insurer from the payment 45 of compensation for injuries or death sustained by an employee during 46 the time the member was a participant in such group self-insurer. Notice 47 of termination of a participating member shall not be effective until at 48 least ten days after notice of such termination, on a prescribed form, 49 has been either filed in the office of the chair or sent by certified or 50 registered letter, return receipt requested, and also served in like 51 manner upon the member. In the event such termination is due to a 52 member's failure to pay required contributions, such member's termi- 53 nation shall not be rescinded more than three times. 54 § 7. This act shall take effect one hundred twenty days after it shall 55 have become a law, and shall apply to a transfer made or obligation 56 incurred on or after such effective date, but shall not apply to aA. 5622 10 1 transfer made or obligation incurred before such effective date, nor 2 shall it apply to a right of action that has accrued before such effec- 3 tive date. For the purposes of this act, a transfer is made and an obli- 4 gation is incurred at the time provided in section 275 of the debtor and 5 creditor law, as added by section two of this act.
