On Bankruptcy and Mediation
Ignoring? (Photo by Marilyn Swanson) By: Donald L Swanson When state legislatures consider a legislative bill, it’s important that they hear from stakeholders who would be affected by that bill. Important ABC Stakeholders When faced with a legislative bill on assignment for benefit of creditors (“ABC”), its important that legislatures hear from a variety of stakeholders,... Continue Reading →
A tool? (Photo by Marilyn Swanson) By: Donald L. Swanson An assignment for benefit of creditors (an “ABC”) under the common law is an out-of-court tool for liquidating a business debtor’s assets in an efficient and credible manner. Such a common law tool has been used, effectively and frequently, for many years in such states... Continue Reading →
The new Act By: Donald L Swanson Assignments for benefit of creditors (“ABCs”) and receiverships have been utilized effectively for centuries under the common law, side-by-side as separate and distinct and complementary remedies for liquidating assets. Differences Differences between the two are that: receiverships are a court-supervised process initiated by a creditor to dispossess the debtor... Continue Reading →
By: Donald L. Swanson On July 23, 2025, the Uniform Law Commission approved and adopted the Uniform Assignment for Benefit of Creditors Act (the “Uniform Act”) for submission to state legislatures. What follows are brief thoughts on why the Uniform Act needs to be enacted by legislatures throughout these United States as soon as possible. A... Continue Reading →
Maximizing value (photo by Marilyn Swanson) By: Donald L Swanson I’m in a discussion, recently, about this question: What are the best ways to maximize value of the assets of a failing business, from the perspective of a debtor’s primary secured creditor? The short answer is this: the best ways—by far—are debtor initiated processes; and the... Continue Reading →
Winners (photo by Marilyn Swanson) By: Donald L Swanson Here’s a hypothetical. Banker is trying to manage credit problems with debtor’s failing business. Debtor’s attorney offers banker a choice among these alternatives: Debtor could give the keys of the business to bank—to liquidate as bank sees fit; Bank could foreclose its liens; Bank could initiate a... Continue Reading →
By Donald L. Swanson “[T]he appellant would not have acquired priority over other creditors by the sheriff's levy, for the obvious reason that the right of property in the goods seized under the execution had previously passed” to the assignee under Debtor’s ABC. Reed v McIntyre, 98 U.S. 507, 512 (1878). Facts The Debtor, in the... Continue Reading →
By: Donald L Swanson Here are three propositions of law, based on the U.S. Supreme Court’s Clark v. White, 13 U.S. 178 (1838), opinion: absent evidence of wrongful knowledge or intent, a creditor’s efforts at racing-to-the-courthouse to collect a debt are among the basic rights of contract that cannot be abridged by the states; state laws... Continue Reading →
By: Donald L Swanson The common law of assignments for benefit of creditors ("ABCs”) has been around for a very long time as an out-of-court process under the law of trusts: debtor is trustor, assignee is trustee, and debtor’s creditors are beneficiaries. And the common law of ABCs had already been well-established, when the U.S. Constitution... Continue Reading →
By: Donald L Swanson A sweet-spot for an assignment for benefit of creditors (“ABC”) in today’s world is this: a failing business needs to liquidate; and bankruptcy laws are inadequate or too expensive. An ABC fills-in where bankruptcy doesn't work. In other words, an ABC is a state-law complement to federal bankruptcy laws . . .... Continue Reading →
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