The proposed bill introduces the Uniform Assignment for Benefit of Creditors Act, which creates a comprehensive legal framework for the assignment of assets by individuals or organizations to benefit their creditors. It defines key terms such as "assignor," "assignee," and "assigned asset," and establishes requirements for assignment agreements, including the stipulation that an assignee cannot be a creditor, affiliate, or insider of the assignor. The bill outlines the responsibilities of both parties, emphasizing the assignee's fiduciary duty to manage the assignment estate in good faith and maximize creditor distributions. It also details the process for notifying creditors, maintaining records, and submitting claims, with the effective date of the assignment agreement being the date it is signed by the last required party.

Additionally, the bill replaces the existing Code chapter 681 with a new chapter, 681A, which governs assignments for the benefit of creditors (ABC). It specifies the powers and duties of assignors and assignees, including the process for removing an assignee under certain conditions, and mandates a final accounting to creditors upon winding up the assignment estate. The legislation clarifies the liability of assignors and assignees, stating that they are not personally liable for each other's actions except in cases of gross negligence or willful misconduct. It also addresses interstate matters, allowing recognition of assignments made under other states' laws, and includes amendments to ensure consistency across related laws. The effective date for the new provisions is set for January 1, 2027.

Statutes affected:
Introduced: 681A.10, 523H.7, 537A.10, 602.8102, 428A.2