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Committee advances framework offering voluntary alternative to bankruptcy
Summary
SB 15 would adopt a statutory framework for 'assignment for benefit of creditors,' providing a voluntary state option that lays out roles for debtors and creditors and adds reporting timeliness; sponsor offered an amendment, which the committee accepted and reported favorably.
Senator Van presented SB 15, describing it as a uniform statute to provide a voluntary state option — an alternative to bankruptcy — for assignment for benefit of creditors. He told the committee that contracts sometimes reference assignment for benefit of creditors but Alabama lacks a framework and the bill lays out parameters for creditors and debtors.
Senator Van asked bankers to review the measure and proposed an amendment addressing reporting timeliness. The sponsor said the amendment was intended to provide more regular reporting and detail during the process. The committee considered the amendment, found it in the package, and accepted it; the sponsor then moved the bill favorably.
No roll-call detail of individual votes was recorded in the transcript excerpt, but the chair indicated there were no objections to reporting the bill favorably. The measure will proceed from committee with the accepted amendment.
If enacted, the statute would establish procedural guardrails for private assignments used as an alternative to federal bankruptcy proceedings; stakeholders indicated they had reviewed the amendment language.
