Motorworld, Inc. v. William Benkendorf077009)

SYLLABUS

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the
convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the
interest of brevity, portions of any opinion may not have been summarized.)

Motorworld, Inc. v. William Benkendorf, et al. (A-64-15) (077009)

Argued November 30, 2016 -- Decided March 30, 2017

PATTERSON, J., writing for a unanimous Court.

In this appeal, the Court considers whether a corporation’s release of a debt constituted a constructively
fraudulent transfer under the Uniform Fraudulent Transfer Act (UFTA), N.J.S.A. 25:2-20 to -34.

In 1988, Morton Salkind arranged for his wife, Carole Salkind, to become the sole shareholder of nineteen
closely held corporations, three of which—Fox Development, Inc. (Fox), Giant Associates, Inc. (Giant), and
plaintiff Motorworld, Inc. (Motorworld)—are involved in this appeal. Defendant William Benkendorf was the
principal owner of defendant Benks Land Services, Inc. (Benks). In 2004, Morton Salkind retained Benks to
provide landscaping services to some of the companies owned by Carole Salkind, including Fox and Giant, but not
Motorworld. Over time Fox and Giant accumulated a debt to Benks of more than $1,000,000 in unpaid bills.

In 2004, Benkendorf approached Morton Salkind for a loan. Salkind agreed and designated Motorworld as
the lender because it had no liabilities. Carole Salkind transferred $499,000 from her personal checking account into
Motorworld’s account. Benkendorf and his wife, defendant Gudrun Benkendorf, executed a note (Note), stating that
they would pay the principal amount of $600,000 by September 16, 2005, and would be assessed a ten percent
penalty and twenty-four percent interest in the event of a default. The Benkendorfs agreed not to “seek a set off,
reduction or use of this Note to offset any money” owed to them or their companies by Fox, any other company in
which Carole Salkind was a principal stockholder, “or any family members of Carole Salkind.” Benks guaranteed
the Note, and Motorworld issued a check for $500,000—$100,000 less than the principal amount stated in the Note.

Despite several amendments to the Note, the Benkendorfs repeatedly failed to pay the principal amount and
thus faced substantial interest and late charges. Benkendorf requested that Morton Salkind treat the amount due as a
setoff of the more than $1,000,000 owed to Benks by Fox and Giant. Salkind agreed and executed a Release on
Motorworld’s behalf, pursuant to which Motorworld would cancel the Note—eliminating Benkendorf’s obligation
to pay the $600,000 in principal, as well as interest and penalties—and Benks and Benkendorf would forgo their
right to collect from Fox and Giant more than $1,000,000 in unpaid bills for landscaping and related services.

In March 2009, Morton Salkind filed a Chapter 7 petition for bankruptcy, and, in June 2009, Carole Salkind
also filed a Chapter 7 petition, listing Fox, Giant, and Motorworld among her corporate assets. The Trustee of both
bankruptcy estates discovered that Motorworld’s $500,000 debt to Carole Salkind was its sole liability and that its
sole asset was the Benkendorfs’ $600,000 debt. On Motorworld’s behalf, the Trustee filed a complaint against the
Benkendorfs and Benks, seeking to collect on the Note. When defendants contended that the Release extinguished
their debt, the Trustee filed a second action seeking to void the Release on the basis of two provisions of the UFTA.

The trial court found that the Release was a constructively fraudulent transfer under N.J.S.A. 25:2-27(a)
because Motorworld received no “reasonably equivalent value” in return for releasing the debt and became insolvent
by virtue of the transfer. The trial court voided the Release and entered judgment in plaintiffs’ favor.

Defendants appealed, contending that the Release did not effect a constructively fraudulent transfer, that
the doctrine of estoppel and the statute of limitations barred plaintiffs’ claims, and that the trial court erred by
awarding interest and penalties. The Appellate Division reversed the trial court, finding that the transfer benefited
Motorworld’s creditor, Carole Salkind, by absolving her other companies of their debt to Benks. The panel did not
reach defendants’ defenses and other arguments and dismissed plaintiffs’ cross-appeal challenging Morton Salkind’s
authority to execute the Release. The Court granted plaintiffs’ petition for certification. 224 N.J. 526 (2016).

HELD: The record reveals no reason to abandon the corporate form. By virtue of the Release, Motorworld
received no value at all, let alone value commensurate with the loss of its sole asset: a debt in the amount of
$600,000 plus accumulating interest and penalties. The disputed transfer was not made for “reasonably equivalent
value” under N.J.S.A. 25:2-27(a), and plaintiffs established all elements of a constructively fraudulent transfer.

1
1. A trustee in bankruptcy has the right to sue parties for recovery of all property available under state law. The
UFTA was enacted to prevent a debtor from placing his or her property beyond a creditor’s reach and allows the
creditor to undo the wrongful transaction so as to bring the property within the ambit of collection. The UFTA
section at issue here provides that “[a] transfer made . . . by a debtor is fraudulent as to a creditor whose claim arose
before the transfer was made . . . if the debtor made the transfer without receiving a reasonably equivalent value in
exchange . . . and . . . the debtor became insolvent as a result of the transfer.” N.J.S.A. 25:2-27(a). (pp. 14-15)

2. A court applying N.J.S.A. 25:2-27(a) must undertake a fact-sensitive inquiry, and that statute requires a party
challenging a transfer to prove several elements. First, the party must establish the existence of a “transfer” or
“obligation.” Second, the party challenging the transfer must demonstrate that the claim of the creditor arose before
the transfer was made or the obligation was incurred. Third, the party must prove that the debtor “was insolvent at
[the] time” of the transfer, or that “the debtor became insolvent as a result of the transfer.” The fourth element that a
party challenging a transfer must prove is at the heart of this appeal: for a transfer to be constructively fraudulent,
the debtor must not receive a “reasonably equivalent value” in exchange for the transfer. (pp. 16-18)

3. The determination of “reasonably equivalent value” is a two-step process. A court must first determine whether
the debtor received value, and then examine whether the value is reasonably equivalent to what the debtor gave up.
The UFTA defines “value” for purposes of fraudulent transfer law to include the satisfaction of a debtor’s
antecedent debt. The UFTA, however, specifically requires that the “reasonably equivalent value” be received by
the debtor, not another person or entity. A party receives reasonably equivalent value for what it gives up if it gets
roughly the value it gave under the totality of the circumstances surrounding the disputed transfer. (pp. 18-20)

4. It is undisputed that the Release effected a “transfer” within the meaning of N.J.S.A. 25:2-27(a), that the
“creditor” with an antecedent claim was Carole Salkind, and that by virtue of that transfer, the debtor, Motorworld,
lost its sole asset and became insolvent. Those determinations leave only one statutory element to be resolved in
this appeal: whether the transfer was made for “reasonably equivalent value.” Ibid. (p. 21)

5. The trial court acknowledged that when Morton Salkind executed the Release, he intended that Motorworld
would relinquish its right to be repaid by the Benkendorfs in accordance with the Note, as amended. Consistent with
the UFTA, however, the trial court looked beyond the intent of Morton Salkind and defendants when they agreed to
the transfer. It considered the impact of the Release on Motorworld, Carole Salkind, and, most importantly, her
creditors, as is appropriate under settled law. The trial court found no evidence that in the operation of the nineteen
companies owned by Carole Salkind, the corporate identities of the companies had been disregarded or the funds of
those entities had been commingled. The trial court concluded that Motorworld was not Carole Salkind’s alter ego
and that the record revealed no reason to disregard the corporate form. Accordingly, the trial court determined that
although the transfer may have been advantageous to Fox and Giant, it failed to benefit Motorworld. (pp. 21-23)

6. The trial court’s findings were thoroughly grounded in the record and amply supported the conclusion that the
disputed transfer was constructively fraudulent for purposes of N.J.S.A. 25:2-27(a). The potential value of the
transfer to Fox and Giant is irrelevant to the inquiry. Neither Motorworld nor Carole Salkind had the slightest
obligation to pay Benks’ bills to Fox and Giant for work that Benks performed on those entities’ behalf.
Motorworld received no “value” when the Release extinguished those entities’ liability to Benks. (pp. 23-25)

7. The UFTA does not charge a court to consider whether a creditor of a debtor—or, for that matter, the debtor’s
individual shareholder—received the “value” at issue. By the statute’s unequivocal terms, the value must be
received by the debtor itself. Moreover, the UFTA should be construed consistently with the basic tenet of
American corporate law that the corporation and its shareholders are distinct entities. (pp. 25-27)

8. The Court concurs with the trial court’s conclusion that the disputed transfer was not made for “reasonably
equivalent value” under N.J.S.A. 25:2-27(a) and that plaintiffs established all of the elements of a constructively
fraudulent transfer claim under that provision of the UFTA. (p. 27)

The judgment of the Appellate Division is REVERSED and the matter is REMANDED to the Appellate
Division for consideration of the defenses and arguments asserted by defendants that it did not reach.

CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN, FERNANDEZ-VINA,
SOLOMON, and TIMPONE join in JUSTICE PATTERSON’s opinion.

2
 SUPREME COURT OF NEW JERSEY
A-64 September Term 2015
077009

MOTORWORLD, INC.,

Plaintiff,

v.

WILLIAM BENKENDORF, GUDRUN
BENKENDORF, BENKS LAND
SERVICES, INC.,

Defendants.

CATHERINE E. YOUNGMAN,
Chapter 7 Trustee for Carole
Salkind,

Plaintiff-Appellant,

v.

WILLIAM BENKENDORF, GUDRUN
BENKENDORF, BENKS LAND
SERVICES, INC.,

Defendants-Respondents.

Argued November 30, 2016 – Decided March 30, 2017

On certification to the Superior Court,
Appellate Division.

Andrew J. Karas argued the cause for
appellant (Fox Rothschild and Forman Holt &
Eliades attorneys); Mr. Karas and Joseph M.
Cerra, on the briefs).

Diana C. Manning argued the cause for
respondents (Bressler, Amery & Ross,
attorneys; Ms. Manning and Benjamin J.
DiLorenzo, on the brief).

1
 JUSTICE PATTERSON delivered the opinion of the Court.

The Uniform Fraudulent Transfer Act (UFTA), N.J.S.A. 25:2-

20 to -34, provides that a transfer made by a debtor is

constructively fraudulent as to a creditor whose claim arose

before the transfer was made, if the debtor made the transfer

without receiving “reasonably equivalent value” in exchange for

the transfer and the debtor was insolvent at that time or became

insolvent as a result of the transfer. N.J.S.A. 25:2-27(a). In

order to constitute “reasonably equivalent value” for purposes

of the UFTA, the “value” must be received by and for the benefit

of the debtor-transferor, not for the benefit of a different

person or entity. Ibid.; Nat’l Westminster Bank NJ v. Anders

Eng’g, Inc., 289 N.J. Super. 602, 605 (App. Div. 1996); Flood v.

Caro Corp., 272 N.J. Super. 398, 406-07 (App. Div. 1994).

In this appeal, a bankruptcy trustee and a corporation

owned by the bankrupt debtor challenge the corporation’s release

of a debt, on the ground that the release constituted a

constructively fraudulent transfer under the UFTA. The debt

that was released had previously been owed to the corporation by

a landscaping business that was a creditor of two other

corporations owned by the same shareholder. The other

corporations’ debts to the landscaping business were

extinguished in exchange for the release.

2
 The trial court concluded that the transfer was

constructively fraudulent under N.J.S.A. 25:2-27(a) because the

corporation relinquished its sole asset without receiving

“reasonably equivalent value” in return. An Appellate Division

panel reversed that determination. The panel held that the

transfer benefited the debtor corporation’s sole shareholder

because it extinguished the debts of two other corporations that

she owned. The Appellate Division determined that the transfer

was therefore made for “reasonably equivalent value” and that it

was not constructively fraudulent under N.J.S.A. 25:2-27(a).

We hold that the Appellate Division panel improperly

ignored the distinction between the corporation that was the

“debtor” for purposes of N.J.S.A. 25:2-27(a) and its

shareholder, as well as the distinction between the debtor

corporation and the other corporate entities that the

shareholder owned. We conclude that the evidence fully supports

the trial court’s determination that the corporation did not

receive “reasonably equivalent value” in exchange for the

disputed transfer. Accordingly, we reverse the Appellate

Division’s judgment and remand to the panel for its

consideration of issues that it did not reach.

I.

We summarize the facts based upon the trial record.

3
 For several decades, Morton Salkind operated a range of

businesses, primarily focused on real estate development. In

1988, he arranged for his wife, Carole Salkind, to become the

sole shareholder of nineteen closely held corporations. Despite

the change of ownership, Morton Salkind continued to manage the

companies. This appeal involves three of those entities:

plaintiff Motorworld, Inc. (Motorworld), established to explore

the prospect of stock car racing at the Meadowlands Sports

Complex; Fox Development, Inc. (Fox), a development company that

built condominiums in Rockaway Township; and Giant Associates,

Inc. (Giant), a development company engaged in a construction

project at the Rockaway Town Hall.

Defendant William Benkendorf (Benkendorf) was the principal

owner of defendant Benks Land Services, Inc. (Benks), which

provided commercial landscaping, excavation, and snow removal

services. In 2004, Morton Salkind contacted Benkendorf, whom he

had known for many years, and retained Benks to provide

landscaping services to some of the companies owned by Carole

Salkind. Over a period of several years, Benks provided

landscaping services to Fox in connection with its residential

development project in Rockaway and to Giant as part of its

Rockaway Town Hall project. It is undisputed that neither Benks

nor Benkendorf provided landscaping services to Motorworld.

4
 Benkendorf testified, and Morton Salkind agreed, that Benks

was paid $5,000,000 for work performed on the Fox development

project alone, and that Fox and Giant accumulated a debt to

Benks in the amount of more than $1,000,000 in unpaid bills for

landscaping and construction services.

In 2004, Benkendorf needed money immediately to resolve a

federal payroll tax issue. Citing Fox’s outstanding bills,

Benkendorf approached Morton Salkind and asked for a loan.

Salkind agreed to arrange a loan. According to Salkind, he

decided to designate Motorworld as the lender in the transaction

because the company was “clean” and had no liabilities.

Following Morton’s instructions, Carole Salkind transferred

$499,000 from her personal checking account into Motorworld’s

bank account. Although the record contains no note or other

document memorializing the transaction between Carole Salkind

and Motorworld, Motorworld’s tax return characterized that

transaction as a “loan” from Carole Salkind to Motorworld.

Benkendorf and his wife, defendant Gudrun Benkendorf,

executed a note dated December 17, 2004 (Note). The Note,

prepared by Morton Salkind’s counsel at his direction, stated

that the Benkendorfs would pay the principal amount of $600,000

by September 16, 2005, and would be assessed a ten percent

penalty and twenty-four percent interest in the event of a

default. The Note recited that the money was being loaned as an

5
“accommodation” to the Benkendorfs so that they could “satisfy

an IRS obligation [that was] imminently due.” The Benkendorfs

agreed not to “seek a set off, reduction or use of this Note to

offset any money” owed to them or their companies by Fox, any

other company in which Carole Salkind was a principal

stockholder, “or any family members of Carole Salkind.”

Benkendorf’s company, Benks, guaranteed the Note. The

obligation was secured by construction equipment and vehicles

owned by Benks and other companies owned by the Benkendorfs.

The same day, Motorworld issued a check to the Benkendorfs for

$500,000 -- $100,000 less than the principal amount set forth in

the Note.

After he and his wife failed to pay the principal amount by

the date set forth in the Note, Benkendorf asked Morton Salkind

to “offset” the “late fees” owed to Motorworld “by monies owed

to Benks by Giant Corp.” Salkind declined Benkendorf’s request

for a setoff. Instead, the parties executed a First Amendment

to the Note on September 29, 2005, providing for a payment

schedule and additional penalties and interest in the event of a

further default.

Although the record suggests that the Benkendorfs made some

payments toward their loan obligation, it is undisputed that

they failed to repay the principal by the extended date. On

October 11, 2006, the parties executed a Second Amendment to the

6
Note, extending the deadline for repayment to January 1, 2007,

and setting a payment schedule for the interest due on the loan.

The Benkendorfs again failed to repay the loan by the extended

date and entered into a Third Amendment to the Note on April 23,

2008. The Third Amendment extended the due date until March 1,

2009, and imposed substantial interest and late charges on the

Benkendorfs.

In light of his escalating obligations, Benkendorf renewed

his urgent request that Morton Salkind “clean this up” by

treating the amount due on the Note as a setoff of the more than

$1,000,000 owed to Benks by Carole Salkind’s companies, Fox and

Giant, for landscaping work. Benkendorf testified that by

August 2008, he was angry at Morton Salkind for declining to

enter into a setoff arrangement. Salkind, then awaiting

sentencing on a federal tax evasion charge, wished to preserve a

business relationship that he “cherished” and agreed to a setoff

arrangement. He insisted, however, on what Benkendorf

characterized as an agreement to “split it down the middle”:

Motorworld, no longer an active company, would cancel the Note -

- eliminating Benkendorf’s obligation to pay the $600,000 in

principal, as well as interest and penalties -- and Benks and

Benkendorf would forgo their right to collect from Fox and Giant

more than $1,000,000 in unpaid bills for landscaping and related

services. To Salkind, the agreement constituted “a two for one

7
deal . . . two to one in my favor,” that he did not consider “a

big deal.” To Benkendorf, the terms of the arrangement were

acceptable, notwithstanding his agreement to forgo repayment of

the $1,000,000 owed, because he “never had much luck pursuing

any debts. It was just a waste of time.”

In accordance with that agreement, Motorworld and

defendants effected the transfer at the center of this case. On

August 8, 2008, Motorworld executed a Release that provided:

This shall serve to confirm that the
$600,000.00 Promissory Note executed on
December 17, 2004 in favor of Motorworld,
Inc.; which Promissory Note was amended three
times, is due March 1, 2009.

This shall further serve to confirm that in
payment of the Promissory Note, Benks Land
Services, owned by William C. Benkendorf, has
performed site work services which were
provided with regard to the Rockaway Town Hall
project, and has provided various construction
and maintenance services, on Buildings 15 &
16.

Based upon all of the above services, the Note
has been satisfied and is at this point Paid
in Full.

The Release was signed by Morton Salkind as Motorworld’s

Vice President. As confirmed by the attorney who prepared the

Release at Salkind’s direction, Motorworld had never been

involved in the construction projects referenced in the Release.1

1 Two months after the Release was executed, a New Jersey court
ordered Morton and Carole Salkind to disclose their assets in
connection with an unrelated action to domesticate a California
8
 In March 2009, Morton Salkind filed a Chapter 7 petition

for bankruptcy in the United States Bankruptcy Court for the

District of New Jersey. In his petition, he listed no corporate

entities as assets. In June 2009, Carole Salkind filed a

Chapter 7 bankruptcy petition, listing Fox, Giant, and

Motorworld among her corporate assets. In her petition, she

stated that the value of her interest in Motorworld was

“unknown.” Consistent with the terms of the Release, Carole

Salkind did not list the Benkendorfs’ debt to Motorworld as an

asset of that company.

The United States Bankruptcy Court appointed Catherine E.

Youngman (Trustee) to serve as the trustee of both bankruptcy

estates. The Trustee’s investigation of Carole Salkind’s assets

revealed that Motorworld conducted no business, that its

$500,000 debt to Carole Salkind was its sole liability, and that

it had a single asset: the Benkendorfs’ $600,000 debt to

Motorworld, guaranteed by Benks, as memorialized in the December

judgment entered against them and several of their companies.
In a Certification dated October 14, 2008, submitted in response
to the court order, Carole Salkind listed Motorworld as one of
her corporate assets and represented that the corporation was
“inactive except it owns a $600,000 note from Bill Benkendorf
which is in default.” At trial in this case, Morton attributed
his wife’s sworn representation that the Note remained in
effect, after the execution of the Release, to an accounting
error.
9
17, 2004 Note. The Trustee’s determination gave rise to this

litigation.

II.

The Trustee filed a complaint, designating Motorworld as

the plaintiff, against the Benkendorfs and Benks. In that

action, Motorworld sought to collect on the Note and enforce its

lien on the collateral that secured the loan. Defendants

contended that the Release extinguished their debt to

Motorworld.

The Trustee then filed a second action against the

Benkendorfs and Benks, seeking to void the Release on the basis

of two provisions of the UFTA. She alleged that Motorworld’s

execution of the Release was an actual fraudulent transfer under

N.J.S.A. 25:2-25(a) and that it was a constructively fraudulent

transfer under N.J.S.A. 25:2-27(a).

The trial court consolidated the actions and conducted a

two-day bench trial. In an oral opinion, the trial court

determined that the evidence did not warrant a finding that the

Release constituted an actual fraudulent conveyance under

N.J.S.A. 25:2-25(a), given the lack of proof that the

transaction was conducted to hinder or defraud Carole Salkind,

Motorworld’s creditor. It concluded, however, that the Release

effected a constructively fraudulent transfer under N.J.S.A.

25:2-27(a), because Motorworld received no “reasonably

10
equivalent value” in return and became insolvent by virtue of

the transfer.2 The trial court voided the Release. It entered

judgment in plaintiffs’ favor in the amount of $1,410,745.51,

including penalties set forth in the Note and its amendments,

plus interest and costs.3

Defendants appealed the trial court’s judgment on the

grounds that the Release did not effect a constructively

fraudulent transfer under the UFTA, that the doctrine of

estoppel and the statute of limitations barred plaintiffs’

claims, and that the trial court should not have awarded

interest or penalties in its judgment. Plaintiffs cross-

appealed, challenging Morton Salkind’s authority to execute the

Release on Motorworld’s behalf.

2 The trial court rejected defendants’ arguments that it lacked
subject-matter jurisdiction over the case, that the Trustee did
not have standing to bring the action, and that plaintiffs’
claims were barred by the statute of limitations. The court
also rejected the defenses of accord and satisfaction and
estoppel asserted by the Benkendorfs and Benks.

3 Following trial but prior to the entry of judgment, the trial
court denied defendants’ motion for a rehearing, further
findings, amendment, and supplementation of the decision
pursuant to Rule 1:7-4, and denied as moot plaintiffs’ cross-
motion for reconsideration and amendment of the court’s findings
of fact and conclusions of law. The court amended its findings,
however, to address in more detail its rejection of defendants’
estoppel argument. In that regard, it relied primarily on
William Benkendorf’s testimony that he considered the pursuit of
unpaid bills to be futile. The court reasoned that Benkendorf
could not have relied on the Release to defendants’ detriment
because he had no intention of pursuing payment in any event.
11
 An Appellate Division panel reversed the trial court’s

determination. The panel acknowledged that the debtor,

Motorworld, received no “benefit of reasonably equivalent value”

under N.J.S.A. 25:2-27(a) in exchange for releasing the Note.

It reasoned, however, that the absence of such a benefit did not

mean that the transfer was not given for “reasonably equivalent

value” because the transfer benefited Motorworld’s creditor,

Carole Salkind, by absolving Fox and Giant of their $1,000,000

debt to Benks. The panel concluded that the Release was not a

constructively fraudulent transfer under N.J.S.A. 25:2-27(a),

and accordingly reversed the trial court’s judgment. The panel

did not consider the defenses of estoppel and the statute of

limitations asserted by defendants on appeal, or defendants’

argument that the trial court should not have assessed interest

or penalties. It dismissed plaintiffs’ cross-appeal.

We granted plaintiffs’ petition for certification. 224

N.J. 526 (2016).

III.

Plaintiffs argue that the Appellate Division panel

improperly viewed Motorworld to be indistinguishable from its

shareholder, Carole Salkind, in the panel’s application of the

“reasonably equivalent value” standard of N.J.S.A. 25:2-27(a).

They assert that the debt that Fox and Giant owed to Benks was

recognized by the trial court to be uncollectible and worthless.

12
Plaintiffs contend that even if Benks’ release of that debt had

“value” to Fox and Giant within the meaning of N.J.S.A. 25:2-

27(a), it had no such value to Motorworld or Carole Salkind

because neither was potentially liable for the debts of Fox or

Giant. They assert that the Release deprived Motorworld, Carole

Salkind, and her creditors of a collectible asset, and that it

was constructively fraudulent under N.J.S.A. 25:2-27(a).

Defendants argue that in a claim under 11 U.S.C.A.

§ 541(a), the Trustee may assert no greater rights than the

bankrupt debtor herself had on the date that the bankruptcy case

commenced, and that the Trustee’s claim is subject to all of the

defenses that the defendants could have asserted against Carole

Salkind. They contend that the Appellate Division panel

properly reasoned that the Release did not financially harm

Carole Salkind, because her companies, Fox and Giant, received

$1,000,000 in landscaping services without paying for those

services. Defendants argue that the Appellate Division’s

finding of “reasonably equivalent value” was premised on the

benefit that Carole Salkind received by virtue of the Release.

They urge the Court to affirm the Appellate Division’s

“inherently equitable” decision.

IV.

A.

13
 The United States Bankruptcy Code “explicitly grants broad

responsibilities to the trustee in collecting the debtor’s

assets and dealing with the bankruptcy estate.” Koch Ref. v.

Farmers Union Cent. Exch., Inc., 831 F.2d 1339, 1342 (7th Cir.

1987) (citing 11 U.S.C.A. §§ 704, 721, 724, 725, 363, 364, 365),

cert. denied, 485 U.S. 906, 108 S. Ct. 1077, 99 L. Ed. 2d 237

(1988). The Bankruptcy Code confers on the trustee “the

authority to represent all creditors and the Debtor’s estate and

. . . the sole responsibility of bringing actions on behalf of

the Debtor’s estate to marshal assets for the estate’s

creditors.” In re Stein, 314 B.R. 306, 311 (D.N.J. 2004).

A trustee in bankruptcy represents every creditor of the

bankrupt debtor. In re Ateco Equip., Inc., 17 B.R. 230, 235

(Bankr. W.D. Pa. 1982). He or she is the only party who can sue

to represent the interests of the creditors as a class. Fisher

v. Apostolou, 155 F.3d 876, 879 (7th Cir. 1998); Stein, supra,

314 B.R. at 311. In accordance with 11 U.S.C.A. § 541(a)(1),

“[w]hatever ‘legal and equitable interests’ the debtor had in

property as of the filing of the bankruptcy petition is property

of the bankruptcy estate.” Koch, supra, 831 F.2d at 1343. A

trustee “has the right to sue parties for recovery of all

property available under state law, such as . . . fraudulent

conveyance claims.” Stein, supra, 314 B.R. at 311.

14
 In this appeal, the state law invoked by the Trustee is the

UFTA, enacted “to prevent a debtor from placing his or her

property beyond a creditor’s reach.” Gilchinsky v. Nat’l

Westminster Bank NJ, 159 N.J. 463, 475 (1999); In re Bernstein,

259 B.R. 555, 557 (Bankr. D.N.J. 2001).4 The statute “allow[s]

the creditor to undo the wrongful transaction so as to bring the

property within the ambit of collection.” Gilchinsky, supra,

159 N.J. at 475.

The UFTA section at issue in this appeal provides:

A transfer made or obligation incurred by a
debtor is fraudulent as to a creditor whose
claim arose before the transfer was made or
the obligation was incurred if the debtor made
the transfer or incurred the obligation
without receiving a reasonably equivalent
value in exchange for the transfer or
obligation and the debtor was insolvent at
that time or the debtor became insolvent as a
result of the transfer or obligation.

[N.J.S.A. 25:2-27(a).]

4 When we apply a uniform act, we may consider the law of other
jurisdictions that have enacted similar provisions. See
DiProspero v. Penn, 183 N.J. 477, 502 (2005) (“[A] legislative
enactment patterned after a statute of another state is
ordinarily adopted with the prior constructions placed on it by
the highest court of the parent jurisdiction.” (quoting Oswin v.
Shaw, 129 N.J. 290, 309 (1992))); E.E. v. O.M.G.R., 420 N.J.
Super. 283, 289 (Ch. Div. 2011) (noting that in applying uniform
acts, courts consider law of sister states that have enacted
similar statutes). As the Third Circuit has stated, in applying
the UFTA, courts “may look to the law in other jurisdictions
that have adopted the [UFTA], and decisions construing analogous
provisions of the Bankruptcy Code.” Klein v. Weidner, 729 F.3d
280, 283 (3d Cir. 2013) (quoting Moody v. Sec. Pac. Bus. Credit,
Inc., 971 F.2d 1056, 1063 (3d Cir. 1992)).
15
 A court applying N.J.S.A. 25:2-27(a) must undertake a fact-

sensitive inquiry, analyzing the circumstances and terms of the

transfer at issue. In re Bundles, 856 F.2d 815, 824-25 (7th

Cir. 1988); Anand v. Nat’l Republic Bank, 239 B.R. 511, 517

(Bankr. N.D. Ill. 1999); see Barber v. Golden Seed Co., 129 F.3d

382, 387 (7th Cir. 1997).

The statute requires a party challenging a transfer to

prove several elements. See SEC v. Antar, 120 F. Supp. 2d 431,

443 (D.N.J. 2000). First, the party must establish the

existence of a “transfer” or “obligation.” N.J.S.A. 25:2-27(a).

For purposes of the UFTA, “transfer” is expansively defined as

“every mode, direct or indirect, absolute or conditional,

voluntary or involuntary, of disposing of or parting with an

asset or an interest in an asset, and includes payment of money,

release, lease, and creation of a lien or other encumbrance.”

N.J.S.A. 25:2-22; see also N.J.S.A. 25:2-28 (explaining when

transfer is made or obligation incurred).

Second, the party challenging the transfer must demonstrate

that the claim of the creditor arose before the transfer was

made or the obligation was incurred. N.J.S.A. 25:2-27(a);

Antar, supra, 120 F. Supp. 2d at 443.

Third, the party must prove that the debtor “was insolvent

at [the] time” of the transfer or obligation, or that “the

debtor became insolvent as a result of the transfer or

16
obligation.” N.J.S.A. 25:2-27(a); In re Advanced Telecomm.

Network, Inc., 490 F.3d 1325, 1332 (11th Cir. 2007), cert.

denied, 552 U.S. 1188, 128 S. Ct. 1326, 170 L. Ed. 2d 73 (2008).

A debtor is deemed “insolvent” if “the sum of the debtor’s debts

is greater than all of the debtor’s assets, at a fair

valuation.” N.J.S.A. 25:2-23(a); Advanced Telecomm. Network,

supra, 490 F.3d at 1332 (“A debtor is conclusively insolvent if

its debts exceed the fair value of his assets.”).

The fourth element that a party challenging a transfer must

prove is at the heart of the dispute in this appeal. The UFTA

requires that in order for a transfer to be constructively

fraudulent, the debtor must not receive a “reasonably equivalent

value” in exchange for the transfer. N.J.S.A. 25:2-27(a);

Advanced Telecomm. Network, supra, 490 F.3d at 1336. In

applying that standard, we consider the UFTA’s fundamental

objective: to protect creditors from transactions that are

either intended to defraud them or otherwise deprive them of

assets to which they are entitled. As the Third Circuit has

observed,

because the fraudulent conveyance laws are
intended to protect the debtor’s creditors, a
lender cannot hide behind the position,
although sympathetic, that it has parted with
reasonable value. The purpose of the laws is
estate preservation; thus, the question
whether the debtor received reasonable value
must be determined from the standpoint of the
creditors.

17
 [Mellon Bank, N.A. v. Metro Commc’ns, Inc.,
945 F.2d 635, 646 (3d Cir. 1991), cert.
denied, 503 U.S. 937, 112 S. Ct. 1476, 117 L.
Ed. 2d 620 (1992).]

The “determination of ‘reasonably equivalent value’ . . .

is a two-step process.” In re Eckert, 388 B.R. 813, 835 (Bankr.

N.D. Ill. 2008). “A court must first determine whether the

debtor received value, and then examine whether the value is

reasonably equivalent to what the debtor gave up.” Ibid. Value

and reasonably equivalent value are measured at the time of the

transaction. See ibid. (measuring equivalent value under

federal fraudulent conveyance act); Janvey v. Golf Channel,

Inc., 487 S.W.3d 560, 569-70 (Tex. 2016) (measuring value and

reasonably equivalent value according to Texas fraudulent

transfer law).

The UFTA defines “value” for purposes of fraudulent

transfer law as follows:

Value is given for a transfer or an obligation
if, in exchange for the transfer or
obligation, property is transferred or an
antecedent debt is secured or satisfied, but
value does not include an unperformed promise
made otherwise than in the ordinary course of
the promisor’s business to furnish support to
the debtor or another person.

[N.J.S.A. 25:2-24(a).]

Accordingly, the satisfaction of the debtor’s antecedent

debt, as well as the transfer of property to the debtor, may

18
constitute “value” that is given in exchange for the challenged

transfer. Ibid. “The reason is that an exchange of value

legitimizes a transaction because it provides the debtor a new

asset or reduction of debt to replace the transferred asset on

the debtor’s balance sheet.” Flood, supra, 272 N.J. Super. at

406-07.

The UFTA, however, specifically requires that the

“reasonably equivalent value” be received by the debtor, not

another person or entity. N.J.S.A. 25:2-27(a). As noted by an

Appellate Division panel, voiding a debtor partnership’s

transfers made in consideration of the forgiveness of the debts

incurred by different partnerships maintained by the same

partners, a “transfer made in satisfaction of the debt of

another is not made for reasonably equivalent value.” Anders,

supra, 289 N.J. Super. at 606; see also Flood, supra, 272 N.J.

Super. at 407. Thus, a critical determination for a court

considering a claim under N.J.S.A. 25:2-27(a) is whether the

“value” at issue has been received by the debtor itself, not by

another person or entity. Anders, supra, 289 N.J. Super. at

606.

“The second inquiry -- whether what the debtor gave up was

reasonably equivalent to what he received -- is more difficult.”

Eckert, supra, 388 B.R. at 835. As one court observed,

19
 [t]he factors utilized to determine reasonably
equivalent value are: (1) whether the value
of what was transferred is equal to the value
of what was received; (2) the fair market
value of what was transferred and received;
(3) whether the transaction took place at
arm’s length; and (4) the good faith of the
transferee.

[Ibid.]

As the Third Circuit has noted, “a party receives

reasonably equivalent value for what it gives up if it gets

‘roughly the value it gave,’” considering the totality of the

circumstances surrounding the disputed transfer. VFB LLC v.

Campbell Soup Co., 482 F.3d 624, 631 (3d Cir. 2007) (quoting In

re Fruehauf Trailer Corp., 444 F.3d 203, 213 (3d Cir. 2006)).

If a plaintiff proves all of the elements of N.J.S.A. 25:2-

27(a), a court may award the remedy of “[a]voidance of the

transfer or obligation to the extent necessary to satisfy the

creditor’s claim.” N.J.S.A. 25:2-29(a)(1).

B.

In that setting, we consider the trial court’s

determination that Motorworld’s Release was not given for

“reasonably equivalent value” under N.J.S.A. 25:2-27(a).

We review the trial court’s factual findings under a

deferential standard: those findings must be upheld if they are

based on credible evidence in the record. D’Agostino v.

Maldonado, 216 N.J. 168, 182 (2013); Seidman v. Clifton Sav.

20
Bank, S.L.A., 205 N.J. 150, 169 (2011). To the extent that the

trial court interprets the law and the legal consequences that

flow from established facts, we review its conclusions de novo.

D’Agostino, supra, 216 N.J. at 182; Manalapan Realty, L.P. v.

Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).

In rulings that are not disputed in this appeal, the trial

court determined that the Release effected a “transfer” within

the meaning of N.J.S.A. 25:2-27(a), that the “creditor” with an

antecedent claim was Carole Salkind, and that by virtue of that

transfer, the debtor, Motorworld, lost its sole asset and became

insolvent. Those determinations leave only one statutory

element to be resolved in this appeal: whether the transfer was

made for “reasonably equivalent value.” N.J.S.A. 25:2-27(a).

The trial court made several critical findings regarding

the reasons for and terms of the transfer. It determined that

Benks provided approximately $5,000,000 in landscaping and

related services to Fox and Giant and that, in August 2008, when

the Release was executed, Fox and Giant owed approximately

$1,000,000 to Benks.5 The court also found that Benkendorf did

not consider the collection of the $1,000,000 owed to Benks by

5 Although no documentary evidence supported Benkendorf’s
contention regarding the companies’ unpaid bills, the trial
court credited Benkendorf’s testimony that he was unable to
document the bills because a fire in Benks’ office trailer had
destroyed the documents. The court noted that Benkendorf had
introduced into evidence an incident report regarding that fire.
21
Fox and Giant to be a worthwhile pursuit. That determination

was supported by Benkendorf’s testimony that he was willing to

forgo the potential collection of the companies’ debts to Benks,

in exchange for the Release, because he had found such

collection efforts to be “a waste of time.”

The trial court acknowledged that when Morton Salkind

executed the Release, he intended that Motorworld would

relinquish its right to be repaid by the Benkendorfs in

accordance with the Note, as amended. The court found that

Benkendorf similarly expected his personal debt to Motorworld,

and that of his wife, to be eliminated in exchange for Benks’

relinquishment of its claim for approximately $1,000,000.

Consistent with the UFTA, however, the trial court looked

beyond the intent of Morton Salkind and defendants when they

agreed to the transfer. It considered the impact of the Release

on Motorworld, Carole Salkind, and, most importantly, her

creditors, represented by the Trustee, as is appropriate under

settled law. See Mellon Bank, supra, 945 F.2d at 646; see also

In re Bernard L. Madoff Inv. Secs. LLC, 740 F.3d 81, 91 (2d Cir.

2014) (“[I]n bankruptcy [a fraudulent transfer] claim is usually

brought by the trustee, for the benefit of all creditors. This

is because the claim is really seeking to recover property of

the estate.” (quoting In re Seven Seas Petroleum, Inc., 522 F.3d

575, 589 n.9 (5th Cir. 2008))).

22
 Significantly, the trial court rejected defendants’

contention that the corporate distinctions between Motorworld

and Fox and Giant, and between Motorworld and its shareholder

Carole Salkind, should be ignored. It found no evidence that in

the operation of the nineteen companies owned by Carole Salkind,

the corporate identities of the companies had been disregarded

or the funds of those entities had been commingled. The trial

court concluded that Motorworld was not Carole Salkind’s alter

ego and that the record revealed no reason to disregard the

corporate form.

Accordingly, respecting the legal distinctions among the

Salkind companies, the trial court concluded that Motorworld

owed nothing to Benks or its owners, the Benkendorfs, when it

executed the Release. It noted that Benks provided landscaping

and related services to Fox and Giant, not to Motorworld. The

court determined that although the transfer may have been

advantageous to Fox and Giant, it failed to provide the

slightest benefit to Motorworld, much less “reasonably

equivalent value” for Motorworld’s release of a $600,000 debt.

The trial court’s findings were thoroughly grounded in the

record. Those findings amply supported the court’s conclusion

that the disputed transfer was constructively fraudulent for

purposes of N.J.S.A. 25:2-27(a). The Release clearly

constituted a transfer as defined in the UFTA. It effected

23
Motorworld’s “dispos[al] of or parting with an asset” --

defendants’ obligation to pay $600,000 plus interest and

penalties to Motorworld. N.J.S.A. 25:2-22. The claim of

Motorworld’s creditor, Carole Salkind, indisputably arose before

the transfer was made. See N.J.S.A. 25:2-27(a). Motorworld

became “insolvent” by virtue of the transfer; as the trial court

noted, Motorworld lost its only asset and was unable to satisfy

its obligation to Carole Salkind. See ibid.

The record also supports the trial court’s pivotal

conclusion: that Motorworld made the transfer that rendered it

insolvent “without receiving a reasonably equivalent value in

exchange for the transfer or obligation.” N.J.S.A. 25:2-27(a).

As the trial court recognized, the potential value of the

transfer to Fox and Giant is irrelevant to the inquiry. Neither

Motorworld nor Carole Salkind had the slightest obligation to

pay Benks’ bills to Fox and Giant for work that Benks performed

on those entities’ behalf. Motorworld gained nothing when those

corporations were relieved of their liability to Benks.

Moreover, the record does not support the notion that Carole

Salkind received an indirect benefit that constitutes “value” to

Motorworld when two other corporations that she owned were

relieved of their obligation to pay their landscaping bills.6 As

6 In oral argument before this Court, defendants contended that
because Carole Salkind personally guaranteed a construction loan
24
noted, the “value” exchanged for the transfer “must be received

by and for the benefit of the debtor-transfer[]or and not some

other person or entity.” Anders, supra, 289 N.J. Super. at 605

(quoting Flood, supra, 272 N.J. Super. at 406). It is clear

that Motorworld received no “value” when the Release

extinguished those entities’ liability to Benks.

The Appellate Division panel acknowledged that Motorworld

did not receive a benefit of “reasonably equivalent value” in

exchange for releasing the Note. The panel, however, rejected

what it viewed to be the trial court’s formulaic application of

the UFTA. It noted that the transfer benefited Carole Salkind

by relieving two other companies owned by her of a significant

debt and concluded that because Salkind was Motorworld’s only

creditor, that benefit constituted “reasonably equivalent value”

made to Fox and Giant, and the proceeds of that loan might have
been used to pay Benks for its landscaping services had the
Release not been signed, she indirectly benefited from the
Release. That argument was not presented to the trial court;
with the exception of a passing reference to a construction loan
in a certification signed by Carole Salkind, the record is
devoid of evidence regarding any such loan. See Selective Ins.
Co. of Am. v. Rothman, 208 N.J. 580, 586 (2012) (holding that
court need not consider issue raised for the first time in
appellate argument). Even if defendants had presented evidence
supporting their contention regarding the construction loan,
that evidence would not have altered the analysis. Benkendorf’s
testimony establishes that he had no intention to seek payment
of Benks’ bills from any source, let alone from a construction
loan. Moreover, defendants do not suggest that the use of the
proceeds of a construction loan to pay Benks’ bills would have
any impact on Motorworld, the “debtor” for purposes of N.J.S.A.
25:2-27(a).
25
for Motorworld’s Release. The Appellate Division panel elected

to treat Motorworld and its sole shareholder as interchangeable

for purposes of N.J.S.A. 25:2-27(a) and to disregard the

distinctions among the three corporate entities because they

shared a common owner.

We do not concur with the panel’s interpretation of the

UFTA. The statute’s plain language prescribes the standard: a

court determines whether the debtor itself received reasonably

equivalent value for its transfer or obligation. N.J.S.A. 25:2-

27(a). The UFTA does not charge a court to consider whether a

creditor of that debtor -- or, for that matter, the debtor’s

individual shareholder -- received the “value” at issue. Ibid.

We do not “rewrite a plainly-written enactment of the

Legislature [or] presume that the Legislature intended something

other than that expressed by way of the plain language.” Marino

v. Marino, 200 N.J. 315, 329 (2009) (alteration in original)

(quoting O’Connell v. State, 171 N.J. 484, 488 (2002)). By the

statute’s unequivocal terms, the value must be received by the

debtor itself.

Moreover, the UFTA should be construed consistently with

the “basic tenet of American corporate law . . . that the

corporation and its shareholders are distinct entities.” Dole

Food Co. v. Patrickson, 538 U.S. 468, 474, 123 S. Ct. 1655,

1660, 155 L. Ed. 2d 643, 652 (2003); see also Fletcher

26
Cyclopedia of the Law of Private Corporations § 31, at 107 (rev.

ed. 2015) (“The properties of two corporations are distinct,

though the same shareholders own or control both.”). As the

trial court recognized, Motorworld, Fox, and Giant were

incorporated and managed as separate corporate entities,

distinct from their common shareholder and from one another.

The record reveals no reason to abandon the corporate form.

Accordingly, we find that, by virtue of the Release,

Motorworld received no value at all, let alone value

commensurate with the loss of its sole asset: a debt in the

amount of $600,000 plus accumulating interest and penalties. We

concur with the trial court’s conclusion that the disputed

transfer was not made for “reasonably equivalent value” under

N.J.S.A. 25:2-27(a) and that plaintiffs established all of the

elements of a constructively fraudulent transfer claim under

that provision of the UFTA.

V.

The judgment of the Appellate Division is reversed, and the

matter is remanded to the Appellate Division so that it may

consider the estoppel and statute of limitations defenses

asserted by defendants and defendants’ challenge to the trial

court’s assessment of interest and penalties.

CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN,
FERNANDEZ-VINA, SOLOMON, and TIMPONE join in JUSTICE PATTERSON’s
opinion.

27