§3307 Defenses, liability, and protection of trans­feree

Summary

Protects people who got property or payments in good faith and paid fair value for them. If a transfer can be undone by the United States, the government can sue to get back the asset’s value, but not more than the debt owed. The court can put the judgment on the first person who got the asset or on later people who received it, except not on buyers who acted in good faith and paid for it or people who got it from them. The asset’s value is measured when it was moved. A good-faith buyer who paid value can keep a lien, keep the property, enforce a promise they received, or have the judgment reduced by what they paid. A transfer is not undoable if it comes from ending a lease after the debtor defaulted under the lease and law, or from enforcing a security interest under UCC Article 9 (or similar state law). Transfers involving an insider are also protected in certain cases: if the insider gave new value after the transfer (unless that new value is secured by a lien), if the transfer was part of normal business, or if it was a good-faith attempt to rescue the debtor that covered both new value and an earlier debt.