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Senate panel passes uniform assignment-for-benefit-of-creditors act to streamline out‑of‑court liquidations
Summary
Senate Bill 12‑52 would adopt a uniform 'assignment for the benefit of creditors' (ABC) framework to provide a lower‑cost alternative to bankruptcy for distressed businesses. Supporters said it would reduce liquidation costs and provide order for creditor claims; the committee voted unanimously to pass the bill.
Senate Bill 12‑52—which adopts a uniform assignment‑for‑benefit‑of‑creditors (ABC) framework—cleared the Senate Finance Committee after testimony from the Uniform Law Commission and legislative counsel.
Witnesses described ABCs as a voluntary, non‑court‑centric mechanism that allows a distressed business to transfer assets to an assignee who liquidates assets and distributes proceeds to creditors under a structured claims process. Proponents said an ABC can be cheaper than bankruptcy, preserve asset value for creditors and reduce public court costs. The bill sets out required contents of the assignment agreement, notice and claims procedures, the assignee’s fiduciary duties and options for limited court involvement.
Committee members asked about creditor lists, notice and protection for unknown creditors; witnesses said the assignor compiles creditor lists, a financing statement/tax filing process provides notice and creditors can file proofs of claim with the assignee.
Senator Leach moved the bill and the committee returned SB 12‑52 with a due‑pass recommendation by unanimous recorded vote.
