PJC Business

F RAUD AND N EGLIGENT M ISREPRESENTATION

PJC 105.26

PJC 105.26 Question on Reasonably Equivalent Value — Constructive Fraud (Tex. Bus. & Com. Code §§ 24.005(a)(2), 24.006(a)) QUESTION ______ Did Dean Debtor transfer any of the assets [ or incur any of the obligations ] listed below without receiving reasonably equivalent value? Answer “Yes” or “No” for each asset [ or obligation ] listed below.

1. [ Asset or obligation 1. ] Answer: _______________ 2. [ Asset or obligation 2. ] Answer: _______________ 3. [ Asset or obligation 3. ] Answer: _______________

COMMENT When to use. PJC 105.26 should be used when the plaintiff alleges a construc tively fraudulent transfer as to present or future creditors based, at least in part, on the debtor’s not receiving reasonably equivalent value for the transfer made or obligation incurred. See Tex. Bus. & Com. Code §§ 24.005(a)(2), 24.006(a). Broad-form submission. PJC 105.26 is a broad-form question designed to be accompanied by one or more appropriate instructions. Tex. R. Civ. P. 277 requires that “the court shall, whenever feasible, submit the cause upon broad-form questions.” Tex. R. Civ. P. 277; see Thota v. Young , 366 S.W.3d 678, 689 (Tex. 2012) (rule 277’s use of “whenever feasible” mandates broad-form submission in any or every instance in which it is capable of being accomplished). For further discussion, see PJC 116.2 regarding broad-form issues and the Casteel doctrine. Source of question. The question is derived from Tex. Bus. & Com. Code §§ 24.005(a)(2), 24.006(a). Debtor and creditor. If there is a factual dispute regarding the status of a perti nent person or entity as a debtor or creditor, a predicate question should be submitted to determine that status. Appropriate definitions of “debtor” and “debt,” or “creditor” and “claim,” should accompany the question. See Tex. Bus. & Com. Code § 24.002(3)–(6). The defrauded creditor need not be the plaintiff, and defendants may include the debtor and the transferee. See Tex. Bus. & Com. Code §§24.005(a)(2),

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