On April 7, Colorado enacted SB 25-133, titled the Colorado Voidable Transactions Act, which amended and renamed the statute formerly known as the “Colorado Uniform Fraudulent Transfers Act.” The Act originally created a defense to an action for a fraudulent transfer or attempts to void a transfer if the transfer was due to enforcing a security interest according to the “Uniform Commercial Code” rules on secured transactions. The amendments change definitions and provisions related to voidable transactions. The definition of “affiliate” has been revised to clarify the ownership and control criteria. The term “claim” is now distinct from “claim for relief,” and there were new definitions for “electronic,” “entity,” “record,” “sign” and “signature” have been added.
The concept of insolvency has been updated to align with the federal bankruptcy code, and the burden of proof regarding insolvency has been specified. The term “fraudulent” has been replaced with “voidable” in various sections as well. The Act specifies that creditors must prove claims for relief by a preponderance of the evidence. It also addresses the extinguishment of claims for relief, setting time limits for bringing actions under different sections.
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