Dale G. Higer is an attorney and a long-time Commissioner for the State of Idaho on the Uniform Law Commission. His newest role is Chair of the Commission’s newly-formed Study Committee on Assignments for Benefit of Creditors.
What follows is Mr. Higer’s report on the Commission and on the work of the newly formed Study Committee.
Uniform Law Commission
The Uniform Law Commission has worked since 1892 to develop uniform and model acts that state legislatures have enacted over 6,000 times. All 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands appoint lawyers as the members of the ULC. However, ULC projects are open to participation by all interested stakeholders, and the ULC greatly values receiving input on its study and drafting efforts.
Study Committee on Assignments for Benefit of Creditors
A new Committee will study the need for and feasibility of a uniform or model act on assignments for benefit of creditors. An assignment for benefit of creditors is a voluntary transfer of property by a debtor to an assignee in trust to apply the property or proceeds thereof to the payment of the debtor’s debts and return the surplus, if any to the debtor. These processes were designed to be used to close businesses down through a more streamlined and less costly process than bankruptcy; however, many states do not have any legal framework for the process and the processes differ significantly among those states that do have them.
Initial Committee Action
The new Study Committee met for the first time on March 29 to discuss its charge and the need to involve stakeholders that would be interested in this project. The Committee will meet again by zoom in May to focus on what a uniform act on this topic should include, if such an act were to be developed, as well as preliminary discussions on the need for an act.
Timeline to Complete its Work
The Committee has a flexible timeline to complete its work. My hope is that we can finish by early fall.
If we recommend to the ULC’s Scope and Program Committee that a drafting committee be appointed and the Executive Committee agrees, then a two-year drafting process would begin.
- In the first year, the drafting committee would hold two weekend meetings to develop a draft of an act, which would then be presented for a full reading at the ULC’s annual meeting the following July.
- At the reading, the full membership of the ULC would question and make suggestions to the drafting committee.
- The Committee would consider these comments and hold two more meetings to fine tune the draft act and report back to the ULC’s next annual meeting where it would again read the act in full.
- The act would then be presented to the annual meeting for adoption by a roll call of the states.
- If approved, the act would then be submitted to the states for adoption.
If anyone is interested in following the work of the Study Committee, please contact Dale Higer at: email@example.com.