PJC Business

F RAUD AND N EGLIGENT M ISREPRESENTATION

PJC 105.27

PJC 105.27 Question on Constructive Fraud

(Tex. Bus. & Com. Code §§ 24.005(a)(2), 24.006(a)) If you answered “Yes” to an asset [ or obligation ] in Question ______ [ 105.26 ], then answer the following question as to the asset [ or obligation ]. Otherwise, do not answer the following question. QUESTION ______ At the time the asset was transferred [ or the obligation was incurred ]— 1. was Dean Debtor engaged in or about to engage in a business or a transaction for which his remaining assets were unreasonably small in rela tion to the business or transaction; or 2. did Dean Debtor intend to incur or believe that he would incur, or should he reasonably have believed that he would incur, debts beyond his ability to pay as they became due; or 3. was Dean Debtor insolvent or did he become insolvent as a result of the transfer [ or obligation ]? Answer “Yes” or “No” for each asset [ or obligation ] as to which you answered “Yes” in Question ______ [ 105.26 ].

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

COMMENT When to use. PJC 105.27 should be used in conjunction with PJC 105.26 to sub mit a cause of action for fraudulent transfer based on constructive fraud under Tex. Bus. & Com. Code §§24.005(a)(2) and 24.006(a). Elements 1 and 2 may apply whether the plaintiff is a present creditor whose claim arose before the transfer was made or the obligation was incurred or is a future creditor whose claim arose within a reasonable time after the transfer was made or the obligation was incurred. Tex. Bus.

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