In Cooling Guard Mechanical Corp. v. Frankl, No. BER-C-119-17 (N.J. Super. Ct. Ch. Div. Aug. 21, 2017), the New Jersey Superior Court decided an issue of first impression under New Jersey law: whether a creditor must have been a creditor at the time of an alleged transfer in order to subsequently avoid the transfer as an actual fraudulent conveyance. The court held in the affirmative. Because the plaintiffs were not creditors at the time of the alleged transfer, the court dismissed the complaint.
The defendants, a husband (Andy) and wife (Dawn), conveyed their residence in Franklin Lakes, which they owned as tenants by the entirety, to Dawn alone in 2004 for the sum of $1.00. For unexplained reasons, and notwithstanding the 2004 conveyance, the defendants repeated this transaction in 2009.
