Date: 03/25/2014

Final
BILL SUMMARY for HB14-1302

HOUSE COMMITTEE ON JUDICIARY

Votes: View--> Action Taken:
Adopt amendment L.001 (Attachment A). The motion p
Refer House Bill 14-1302, as amended, to the Commi		Pass Without Objection
PASS



01:43 PM -- HB14-1302

The committee was called to order. A quorum was present. Representative Buckner, prime sponsor, presented House Bill 14-1302, concerning the addition of a judgment against a debtor or transferee who acts with actual intent as an available remedy for a creditor in a fraudulent transfer action. Representative Buckner provided background on the fraudulent movement of assets, and explained the effect of the bill. Representative Buckner also explained the effect of prepared amendment L.001 (Attachment A). Representative Buckner deferred further questions about the amendment to testimony.

14HseJud0325AttachA.pdf14HseJud0325AttachA.pdf

01:49 PM

The following persons testified regarding House Bill 14-1302:

01:52 PM -- Mr. Ross Pulkrabek, representing the Colorado Trial Lawyers' Association, and Mr. Bruce Mohrlang, representing himself, testified in support of the bill. Mr. Mohrlang explained how his family had been defrauded through the sale of the family business.

01:53 PM -- Mr. Jim Perry, representing himself, testified in support of the bill. Mr. Perry explained how employees of his business stole money from the business and then transferred the stolen funds to avoid repayment. Mr. Perry also discussed remedies available to the victims in such situations.

01:57 PM -- Mr. Alan Friedberg, representing himself as an attorney who handles debt cases, testified in support of House Bill 14-1302. He spoke in support of creating penalties for fraudulent transfer actions, and related a story about one of his clients who was defrauded, with the proceeds being protected through fraudulent transfers. He discussed the litigation burdens that creditors face in such cases. Mr. Friedberg responded to questions regarding the resources expended in the case he discussed. Mr. Friedberg clarified the effect of amendment L.001. Mr. Pulkrabek returned to provide additional clarification on the amendment. Mr. Pulkrabek responded to questions regarding the intent element in amendment L.001, and the purpose of the last sentence in the amendment.


02:08 PM

Discussion continued regarding the effect of amendment L.001. Mr. Pulkrabek provided an example of a fraudulent transfer in anticipation of a judgment under the bill, and the penalties that would be levied under the bill. Discussion followed regarding the ability to determine the value of subject assets under amendment L.001, and the requirement of insolvency of the debtor for the provisions of the bill to apply. Mr. Pulkrabek responded to questions regarding the penalties that would apply to a transferee receiving assets under fraudulent circumstances under the bill.


02:19 PM

Discussion ensued regarding the ability of creditors to recover attorney fees or punitive damages through a judgment under House Bill 14-1302. Discussion returned to the effect of the last sentence of amendment L.001.

02:22 PM -- Mr. Alan Greenberg, representing the Colorado Creditors' Bar Association, testified in support of the bill. Mr. Greenberg discussed the population that would be affected by the bill and amendment L.001, and the balance struck by the bill. Mr. Greenberg responded to questions regarding the admonitory effect of amendment L.001.

02:27 PM -- Mr. Gary Schwartz, an accountant with the firm Betzer, Call, Lausten, and Schwartz representing the Colorado Chapter of the Association of Certified Fraud Examiners, testified in support of House Bill 14-1302. He discussed the need to create deterrents to fraudulent transfers to avoid creditor judgments. Mr. Schwartz responded to questions regarding the potential deterrent effect of the bill.

02:29 PM -- Mr. Jeff Ruebel, representing the Civil Justice League and the Colorado Defense Lawyers' Association, testified on the bill from a neutral position. He explained that amendment L.001 brings his organization to a neutral position on the bill, and discussed objections that the organization originally had with the bill. He discussed the merits of amendment L.001. Mr. Ruebel discussed the stakeholder process that resulted in the drafting of amendment L.001. Mr. Ruebel clarified the position of his organization on the bill, as amended.


02:36 PM
BILL:HB14-1302
TIME: 02:36:13 PM
MOVED:Buckner
MOTION:Adopt amendment L.001 (Attachment A). The motion passed without objection.
SECONDED:Court
VOTE
Buckner
Court
Gardner
Lawrence
McLachlan
Murray
Excused
Pettersen
Salazar
Waller
Lee
Kagan
YES: 0 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: Pass Without Objection


02:37 PM

Representative Buckner provided closing remarks in support of House Bill 14-1302.
BILL:HB14-1302
TIME: 02:37:50 PM
MOVED:Buckner
MOTION:Refer House Bill 14-1302, as amended, to the Committee of the Whole. The motion passed on a vote of 10-0.
SECONDED:Salazar
VOTE
Buckner
Yes
Court
Yes
Gardner
Yes
Lawrence
Yes
McLachlan
Yes
Murray
Excused
Pettersen
Yes
Salazar
Yes
Waller
Yes
Lee
Yes
Kagan
Yes
Final YES: 10 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: PASS