House adopts modern assignment-for-creditors law to aid distressed businesses

The Iowa House on the floor adopted Senate File 2497, a bill to replace an antiquated, rarely used state law with a modern Uniform Assignment for Benefit of Creditors Act intended to help financially distressed businesses preserve asset value for creditors.

Representative Holt, the bill’s floor manager, told colleagues the measure is a "debtor-initiated process" that does not require judicial supervision and "aims to maximize the value of business assets" by imposing fiduciary duties on assignees and encouraging cooperation between debtors and creditors.

An amendment, H8473, introduced with input from the bankers association, business groups and bar representatives, changed a filing provision from a discretionary 'may' to a mandatory 'shall' for updated UCC statements and added a conforming release filing once an assignee completes duties. Representative McBurnie described the change as a rare example of stakeholders agreeing on a sensible fix; the amendment was adopted by voice vote.

After the amendment’s adoption the clerk read the bill for final passage. The House recorded 85 ayes, 0 nays and 15 absent or not voting; the bill received a constitutional majority and the title was agreed to.

The measure creates a nonjudicial alternative intended to allow businesses in distress to manage and sell assets outside of an adverse forced sale, with statutory duties for assignees designed to protect creditors’ recoveries. The bill text references a tax exemption on related transfers of real estate tied to assignments.