House committee advances Colorado Avoidable Transaction Act after amendments

Senate Bill 133, which sponsors described as a modernization of Colorado's law on fraudulent or voidable asset transfers, was advanced by the House Finance Committee to the Committee of the Whole on a super-favorable recommendation.

The bill, introduced by Representative Camacho and co-prime Representative Soper, would rename the Colorado Uniform Fraudulent Transfer Act (CUFTA) to the Colorado Avoidable Transaction Act and update definitions, choice-of-law and treatment of electronic records to align with contemporary business practices. "This bill represents an important modernization of our state's legal framework for addressing fraudulent and improper financial transactions," Representative Camacho told the committee.

The sponsors said the measure keeps the law's core purpose'preventing transfers that improperly shield assets from creditors'while aligning Colorado with reforms adopted by other states and clarifying ambiguous definitions such as "insider." Representative Soper previewed an amendment (L2) to remove a provision (comment 8) that the sponsors said would have made Colorado less competitive. The amendment was moved and adopted without opposition.

Expert witnesses from the Colorado Bar Association described the intent as clarification and modernization. Holly Shilleade of McCarthy & Holtz, speaking for the Colorado Bar Association's Business Law Section, said the measure does not change the civil burden of proof and that the act's reforms let courts "claw back" transfers that unfairly favor related parties. Haley Lamborn, representing trust and estates interests, said an amendment clarifies that Colorado residents can continue to benefit from self-settled asset-protection trusts formed under other states' statutes.

Committee members asked about the practical effect of definition changes and whether the bill expands state reach into private transactions. Sponsors and witnesses said the revisions were intended to limit bankruptcy-specific concepts and to leave some development of terms (like "insider") to courts and existing case law. With no further questions, sponsors moved the bill to the Committee of the Whole. The roll call recorded the House Finance Committee's vote as 10 to 3 to advance the amended bill.

The committee adopted the L002 amendment and voted to advance the bill for consideration by the full House.

Votes at a glance: Senate Bill 133 as amended was sent to the Committee of the Whole with a super-favorable recommendation (motion by Representative Camacho; second by Representative Gonzales). Final committee vote: 10 yes, 3 no.