Morrison Sund client prevails following court trial involving Minnesota’s Uniform Fraudulent Transfer Act.

Posted on 08/31/2015

Eric Nasstrom and Ryan Dreyer represented client Hazeltine Gates, LLC in an action in which Hazeltine Gates alleged that its former tenant violated Minnesota’s Uniform Fraudulent Transfer Act (“MUFTA”).  The tenant ceased paying rent to Hazeltine Gates.  Several months later, the tenant sold its assets to a new entity that had the same officers and employees, provided the same professional services, and except for the space owned by Hazeltine Gates, operated out of the same locations.  Hazeltine Gates obtained a judgment against the tenant, but later learned of the asset sale when it attempted to collect on the judgment.  At trial, Hazeltine Gates argued that the tenant’s sale of its assets to the new entity was made to hinder, defraud and delay its efforts to collect its judgment.  Further, it presented evidence that the fair market value of the assets the tenant transferred to the new entity, including good will, far exceeded the liabilities of the tenant, and thus, the tenant transferred assets from which Hazeltine Gates could have collected.  Following a three-day court trial in April 2015, the trial court agreed with Hazeltine Gates and ruled that the new entity violated MUFTA and thus was liable for the judgment.  See Hazeltine Gates, LLC v. William P. Hoffman, et al. (Hennepin County Dist. Court 27-CV-14-2914).

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