Last Friday, Florida Governor Rick Scott signed HB 95.
This bill amends § 726.109 of the Florida Statutes by adding this broad defense
to a claim to avoid a charitable contribution as a fraudulent transfer:
"The transfer of a charitable contribution that is received
in good faith by a qualified religious or charitable entity or organization is
not a fraudulent transfer[.]"
However, this broad protection for charitable
contributions has several limits:
1. The transfer was consistent with the practices of the
debtor in making the charitable contribution; or
2. The transfer was received in good faith and the amount
of the charitable contribution did not exceed 15 percent of the gross annual
income of the debtor for the year in which the transfer of the charitable
contribution was made.
This may sound familiar because it is similar to a law
enacted in Minnesota last year (seeThe Ponzi Scheme Blog of April 13, 2012, "Legislative Protection for Charities Caught by Ponzi Clawbacks"
for a review of that law). The new Florida limits are also similar to the
limits on the recovery of charitable contributions found in Bankruptcy Code § 564(a)(2).
It will be interesting to see if other states follow the
leads of Minnesota and Florida in protecting charities from fraudulent transfer
Florida HB 95 is here.
Read additional articles at The Ponzi Scheme
Kathy Bazoian Phelps is the co-author of The Ponzi Book: A Legal
Resource for Unraveling Ponzi Schemes (LexisNexis 2012), along with
Hon. Steven Rhodes. The Ponzi Book, recently reviewed by the ABI Journal and Commercial
Crime International, is available for purchase at www.lexisnexis.com/ponzibook,
and more information about the book can be found at www.theponzibook.com.
Watch Kathy's interview on the The Not So Legal Show.
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