07-26-11 STEVEN JECKER VS. HIDDEN VALLEY, INC., ET AL. A-3898-09T3
Plaintiffs filed suit under the Uniform Fraudulent Transfer Act (the UFTA), N.J.S.A. 25:2-7 to -19, seeking to impose a constructive trust on the proceeds from the sale of a ski resort, Hidden Valley, Inc. (Hidden Valley), to a group of investors. The principal of Hidden Valley held two mortgages and other security interests on all assets of the ski resort. The mortgages and security interests were recognized and preserved during bankruptcy reorganization that pre-dated plaintiffs' claims.While plaintiffs' lawsuits against Hidden Valley were pending, the principal foreclosed on his mortgages, was the sole bidder at the sheriff's sale, and ultimately transferred the resorts assets. The trial judge concluded that plaintiffs failed to prove any fraudulent intent.
We affirmed, but for other reasons. We concluded that under the UFTA, the foreclosure was not a "transfer" of an "asset" of the debtor. And, the subsequent sale had none of the "badges of fraud" discussed in Gilchinsky v. Nat'l Westminster Bank N.J., 159 N.J. 463 (1999).
