In Wilmington Savings Fund Society v. Kaczmarczyk, (Del. Ch., March 1, 2007), 2007 WL 704937, read opinion here, the Delaware Chancery Court granted a constructive trust regarding proceeds from the sale of property that the court determined was a fraudulent conveyance of jointly held property by a husband and wife. The husband fraudulently conveyed the property to his wife in order to avoid a claim by the bank–and after the bank had filed suit against him. The court was not persuaded by the argument that the wife used inheritance money as a down payment to buy the house.
This is the first Delaware decision to interpret Section 1305 of Title 6 of the Delaware Code, which is the Uniform Fraudulent Transfer Act ("UFTA"). The UFTA was adopted in Delaware in 1996, and since then no reported decisions have addressed that section. (Though in footnote 35 the court cites to three recent Delaware ases, all summarized on this blog, that have addressed other sections of the UFTA.)
In addition to a thorough analysis of the UFTA, the court discussed the requirements for a constructive trust, which includes "identifiable proceeds".