Uniform ABC act proposed in Nebraska aims to offer an alternative to bankruptcy
Loading...
Summary
Sen. Bob Holstrom presented LB783 to adopt the Uniform Assignment for Benefit of Creditors Act, reintroducing an ABC statutory framework last held in Nebraska before repeal in 1945; drafters and industry witnesses said ABCs can maximize creditor recoveries and avoid certain bankruptcy 'preference' clawbacks.
Sen. Bob Holstrom introduced LB783 to adopt a modern uniform Assignment for Benefit of Creditors (ABC) Act drafted by the Uniform Law Commission. Holstrom said Nebraska has not had an ABC statute since 1945 and that LB783 would codify procedures for a debtor‑initiated, efficient wind‑up of distressed businesses, impose fiduciary duties on assignees, and provide an alternative to receivership or bankruptcy.
Larry Ruth and Don Swanson — delegates to the Nebraska Uniform Law Commission and participants in drafting — told the committee the act provides clarity and uniformity for states, and Don Swanson recounted why Nebraska lacks a current ABC statute (chapter repealed in 1945). Swanson described practical advantages over chapter 7 bankruptcy, including lower costs and avoidance of preference clawbacks that can harm unsecured creditors.
Banking representatives and trade associations supported the bill, saying ABC procedures are less disruptive, preserve lien rights for secured creditors, and often yield higher distributions to creditors than public bankruptcy proceedings. Senator Holstrom asked for favorable consideration and the hearing concluded with no recorded opposition testimony.
