A transferee facing an avoidance claim has more defences than the badges of fraud suggest.
Good faith and value. A transfer is not voidable against a person who took in good faith and for a reasonably equivalent value, and a transferee who gave value retains a lien or may enforce the obligation to the extent of the value given. Good faith is assessed objectively in most formulations — inquiry notice of the debtor’s intent defeats it.
Reasonably equivalent value. Payment of an antecedent debt is value. Ordinary course payments to a trade creditor are the easiest transfers to defend.
Solvency. The constructive fraud theories require insolvency, unreasonably small capital, or an inability to pay debts as they came due. A contemporaneous balance sheet and cash flow analysis is the defence, and expert valuation frequently decides it.
Limitations. The periods are specific and shorter than general contract periods, running from the transfer or, for actual fraud, from reasonable discovery, with an outer limit.
Indirect benefit. Where the debtor did not receive value directly but benefited — a guarantee supporting a facility its affiliate drew on — courts consider the indirect benefit received.
Standing. Whether the claimant was a creditor at the relevant time.