Sale of Real Estate from the Holding Company to Another Company Within the Same Group: When Is There a Risk of Sham Transaction or Fraud Against Creditors?

Is the Sale of Real Estate Between Companies Within the Same Group Illegal?Is the sale of real estate belonging to the asset-holding company to another company within the same economic group unlawful or fraudulent? As a rule, no. The intragroup transfer of real estate is legally lawful and common in corporate and real estate reorganizations. The legal risk does not lie in the sale itself, but in the circumstances, the form, and the context of the transaction. Invalidity may only be recognized upon concrete proof of sham transaction, fraud, or abuse.

In the business and real estate environment, reorganizing assets is not the same as defrauding creditors.

What is the legitimate purpose of an intragroup sale? An intragroup sale may serve legitimate purposes, such as:

• asset and corporate reorganization;• centralization or decentralization of assets;• enabling financing or guarantees;• lawful accounting and tax adjustment;• rationalization of economic activity.

These purposes do not imply illegality.

When may the sale be considered a sham transaction? A sham transaction may be recognized where there are indications such as:

• absence of actual payment of the price;• a price manifestly incompatible with market value, without justification;• lack of financial capacity of the purchaser;• fictitious or circular payment;• continued control and use of the asset without any factual change;• temporal proximity to relevant enforcement proceedings or attachments.

A sham transaction requires proof, not presumption.

Is a sale below market value automatically fraudulent?Not automatically.

A below-market price:

• does not, by itself, presume fraud;• may result from business strategy, the condition of the asset, or negotiating circumstances;• requires an analysis of the context and the actual consideration provided.

Fraud arises when a grossly inadequate price forms part of a set of acts intended to frustrate creditors.

May the transfer be considered fraud against creditors? Only if the legal requirements are present, such as:

• the existence of a credit claim prior to the transfer;• the debtor’s insolvency after the sale;• the purchaser’s awareness of the prejudice to creditors;• a causal link between the transfer and the frustration of enforcement.

Without these elements, the transfer remains valid.

Does the existence of an economic group change the analysis?Not by itself.

The economic group:

• does not automatically invalidate intragroup transactions;• does not eliminate asset segregation;• does not authorize a presumption of sham transaction.

The analysis must be case-specific, technical, and evidentiary.

Is a specific proceeding required in order to set aside the sale?Yes.

Invalidation of the transfer requires:

• a proper legal action or appropriate procedural incident;• due process and full defense;• specific proof of fraud or sham transaction;• a reasoned judicial decision.

Summary invalidation is legally unsustainable.

Does the mere frustration of enforcement invalidate the sale?No.

Frustration of enforcement:

• does not replace proof of fraud;• does not authorize broad presumptions;• does not turn asset reorganization into an unlawful act.

Frustrated enforcement is not a shortcut to invalidate valid transactions.

Is judicial review rigorous in these cases?Yes.

The Judiciary tends to:

• distinguish lawful reorganization from fraud;• require robust and contemporaneous proof;• preserve the legal certainty of transactions;• prevent generic and automatic invalidations.

Judicial review operates as a restraint against insecurity in the real estate market.

Conclusion: selling between group companies is lawful; fraud is the exception The intragroup sale of real estate:

• is legally possible and common;• does not presume sham transaction or fraud;• requires an analysis of the context and the actual performance of the transaction;• may only be set aside upon concrete proof of abuse;• forms part of a legitimate asset-organization technique.

In Business Law as applied to Real Estate, a valid transaction is not invalidated by suspicion alone — it requires

proof.

Ferreira Advocacia acts with technical rigor in matters involving asset reorganizations, intragroup real estate sales, complex enforcement proceedings, fraud against creditors, and real estate protection, offering precise and strategic legal analysis.