Posted by Meaghan Kirby in Connecticut Law, Employment Law
Aug 28 2026
Can an Employer Move Assets to Avoid Paying an Employment Claim?
Employees pursuing legal claims sometimes face a troubling development: after a dispute arises, the employer begins moving money, property, or other assets elsewhere to avoid being able to pay. Connecticut law provides important protections when those transfers are intended to put assets beyond an employee’s reach.
Under the Connecticut Uniform Fraudulent Transfer Act (CUFTA), Conn. Gen. Stat. §§ 52-552a through 52-552l, a transfer may be fraudulent if it is made with the intent to hinder, delay, or defraud someone with a legal claim. Importantly, an employee does not need to have already won a lawsuit or obtained a judgment to receive CUFTA’s protections. The statute broadly defines a “claim” as a right to payment – even if that right is disputed, contingent, unliquidated, or has not yet been reduced to a judgment. That means an employee asserting a claim for unpaid compensation, discrimination, retaliation, wrongful termination, or other monetary damages may qualify for protection, even before the underlying employment case has been resolved.
Because fraudulent intent is rarely admitted outright, courts look at the circumstances surrounding the employer’s transfer of assets. Warning signs can include transfers made after the employer was sued or threatened with a lawsuit; transfers to the company owners, an owner’s family members, affiliated companies, or other insiders; concealed or unexplained transfers; moving substantially all of a business’s assets at the same time; receiving far less than fair value in return; or becoming insolvent shortly after the transfer. No single factor necessarily establishes fraud, but a combination of suspicious circumstances may provide strong evidence that assets were moved to frustrate a potential creditor.
The law also gives plaintiffs tools to act before the assets disappear. Depending on the circumstances, an employee may seek a prejudgment attachment or an injunction restricting additional transfers while the lawsuit is pending. In other words, an employee may ask the court to freeze or protect the employer’s assets while the lawsuit is still pending, so the employer cannot move them out of reach. If a court finds that an employer fraudulently transferred assets, it can undo the transfer, prevent additional transfers, or take other steps to make sure those assets remain available to pay the employee’s claim. Connecticut common law also supplements these statutory protections against fraudulent transfers.
For employees, the practical takeaway is that an employer cannot necessarily escape potential liability simply by emptying out their bank accounts, transferring their valuable property, or hiding their assets after learning of a claim. Not every sale, restructuring, or transfer is fraudulent, and these cases are highly dependent on the particular facts. But if an employer appears to be moving or concealing assets after an employment dispute arises, timing can be critical. An employment attorney can evaluate whether a fraudulent-transfer claim or an immediate request to preserve assets should be considered before those assets become more difficult to recover.
Posted by Meaghan Kirby in Connecticut Law, Employment Law
Tagged assets, employer, employment claim, law
