In April of 2018, the Georgia legislature presented to Governor Nathan Deal HB 441 for signature, which permitted the use of DAPTs in Georgia. The statute contained many of the similar flavors of other DAPT statutes, with a few notable exceptions like allowing tort creditors to reach assets in the DAPT. A few days after being presented with HB 441, Governor Deal vetoed the bill.

In his press release, the Governor cited potential unintended consequences of the bill and that the state of Georgia wished to ensure that the creditor-debtor relationship is equitable and facilitates economic prosperity and mobility. The Governor thus concluded that DAPTs without proper safeguards have the potential to negatively impact the creditor-debtor balance.

Taking a step back, it is interesting that the Governor cites the potential to disturb the debtor-creditor balance for his veto. Much of the criticism against DAPTs fixates on the thought that DAPTs allow a debtor to “stiff” a creditor, and it would appear the Governor bought that line of criticism. However, a cursory review of DAPT case law shows that time and time again, DAPTs are unwound at even the faintest hint of fraud. Indeed, fraudulent transfer law already protects against a debtor stiffing his or her creditors, so the Governor’s criticism seems misplaced. It will be interesting to follow whether DAPT legislation is introduced again in Georgia and presented to incoming Governor Brian Kemp.