On Bankruptcy and Mediation
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 →
By: Donald L Swanson Congress must be permitted “at long last to fashion a modern bankruptcy system which places the basic rudiments of the bankruptcy process in the hands of an expert equitable tribunal.” Granfinanciera v. Nordberg, 492 U.S. 33, 94 (1989) (Justices Blackmun and O’Connor dissenting, emphasis added). Justices Blackmun and O’Connor were right, of... Continue Reading →
A poison-pill? (Photo by Marily Swanson) By: Donald L Swanson The common law of assignments for benefit of creditors (“ABC”) has been around for centuries. ABC is a business debtor’s voluntary liquidation tool—typically utilized in cooperation with a major secured creditor. Historically, ABCs are attractive to debtors and creditors alike as an efficient, mostly out-of-court tool... Continue Reading →
By: Donald L Swanson I’m serving on a Drafting Committee of the Uniform Law Commission for a uniform law on assignment for benefit of creditors (“ABC”). A draft of such a uniform law is coming together, with lots of input from many people and organizations. But we are always looking for more input. So, if you'd like to participate... Continue Reading →
California dreamin’ (photo by Marilyn Swanson) By: Donald L Swanson The following combination of facts seems odd . . . and confusing. The Uniform Voidable Transactions Act ("UVTA") authorizes (in Sec. 5(b)) unsecured creditors to avoid insider preferences, with a one-year reach back, when the insider "had reasonable cause to believe that the debtor was insolvent"... Continue Reading →
An Illinois view (photo by Marilyn Swanson) By: Donald L Swanson Assignments for benefit of creditors (“ABC”) are rarely used in these United States. That’s for two reasons: (i) some states have no ABC statute and do not recognize the common law of ABCs, and (ii) other states have onerous ABC statutes that no one wants... Continue Reading →
Supervision (Photo by Marilyn Swanson) By: Donald L Swanson For some reason, there is a fascination out there (not sure where, exactly) with having every assignment for benefit of creditors (“ABC”) supervised by a court from the get-go. This fascination suggests that every ABC effort requires court action and judicial approvals, from the beginning and throughout... Continue Reading →
Working together? (Photo by Marilyn Swanson) By: Donald L Swanson Illinois follows the common law of assignments for benefit of creditors (“ABC”): a non-judicial, trust-like process for liquidating a failed business. That ABC process can work, hand-in-hand, with the Bankruptcy Code. The case of In re Computer World Solutions, Inc., Case No. 07-21123, Northern Illinois Bankruptcy... Continue Reading →
Really-cool but rarely used (photo by Marilyn Swanson) By: Donald L Swanson There are lots of state statutes out there on assignments for benefit of creditors (“ABC”) with really-cool provisions. But the problem with those really-cool provisions is this: they are rarely used. Put plainly: a failing businesses needs to shut its business down efficiently... Continue Reading →
Screwdriver v. Hammer By: Donald L Swanson Assignment for benefit of creditors (“ABC”) has existed for centuries under the common law of England and the United States. And the ABC process has worked well under that common law! ABC Function ABC has been an effective tool in the toolbox of debtor and creditor remedies for resolving... Continue Reading →
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