When Is a Right of Publicity License Granted to a Loan-out Corporation a Fraudulent Conveyance

This article answers the question whether a creditor of the talent, who rendered services through a loan-out corporation [or limited liability company], can directly reach the talent's revenue stream paid by the studio [or other obligor] due the loan-out. Some talents have left a trail of multi-million dollar obligations, including spousal and child support, unpaid taxes, tort claims, and debts that arise from an extravagant lifestyle. Seeking payment of these large-dollar obligations, these creditors draw a bead on revenue stream payable to the loan-out. More than one celebrity or sports star finds himself or herself on the "top-ten list of bad boy or bad girl" debtors.

Given these considerations, the better question is whether a talent's execution of a license that transfers the talent's right of publicity to the loan-out corporation is a fraudulent conveyance. The Uniform Voidable Transactions Act (UVTA) answers this question.