Senate advances uniform ABC law to help wind up distressed businesses

The Legislature voted to advance LB7 83 after Sen. B. Hallstrom described the bill as a state‑level modernization that creates an assignment‑for‑benefit‑of‑creditors (ABC) procedure to wind up financially distressed businesses more efficiently than federal bankruptcy.

Hallstrom said the model law was promulgated by the Uniform Law Commission in 2025 and that the bill would codify clear procedures and fiduciary duties for assignees acting for creditors’ benefit. “LB7 83 creates an effective alternative to bankruptcy and receivership processes,” Hallstrom said on the floor, listing benefits including initiation by the debtor, no mandatory judicial supervision, and fiduciary duties that aim to maximize creditor recoveries.

Senators who sit on the Banking, Commerce and Insurance Committee and members who questioned the bill said protections exist for creditors, including claw‑back provisions similar to bankruptcy’s 90‑day preference and the option for creditors to seek involuntary bankruptcy if warranted. Sen. J. Jacobson noted those federal avenues remain available and committee witnesses from the Uniform Law Commission and banking associations testified in favor; the bill carried an 8‑0 committee vote.

LB7 83 was advanced to E & R initial for engrossment and will proceed on the calendar for select file consideration.