Former Chairman's Stock Transfers to Wife Are Set Aside as Fraudulent
The Arkansas Court of Appeals affirmed the setting aside of a fraudulent stock transfer in Laird v. Weigh Systems South II, Inc., No. 06-890 (4/25/07).
In April 2004, Weigh Systems won a large monetary judgment against James Laird, its former chairman. In late 2002 and early 2003, Laird transferred stock to his wife Donna. Weigh Systems filed suit claiming this transfer was made with intent to defraud creditors. See A.C.A. § 4-59-204(a)(1). The jury agreed and entered a verdict for Weigh Systems.
The Court of Appeals affirmed, finding there was substantial evidence for the jury to reach its decision. The court also noted that transfers to close family members of debtors are heavily scrutinized.
