Category: Assignment for benefit of creditors

ABCs & Bankruptcy, Part 1: The Need For “An Expert Equitable Tribunal” To Provide Court-Supervision (Granfinanciera v. Nordberg)

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 →

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Bond Requirement In Many ABC Statutes—A Poison Pill

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 →

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ABCs (Assignments for Benefit of Creditors) Are NOT Receiverships—And Should NOT Be Treated As Receiverships!

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 →

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ABCs (Assignments for Benefit of Creditors) are an ADR (Alternative Dispute Resolution) Process

By: Donald L SwansonI’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. And we are always looking for more input! At one point, I’m... Continue Reading →

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Subject Matter Jurisdiction: An Assignment For Benefit Of Creditors Requirement (In re Vernon Hills)

Subject matter jurisdiction? (Photo by Marilyn Swanson) By: Donald L Swanson Delaware’s Court of Chancery has no subject matter jurisdiction over an assignment for benefit of creditors proceeding when the debtor/assignor is an Illinois corporation with no assets or operations in Delaware, even when its ABC assignee/trustee is from Delaware. That’s the decision of Delaware’s Court... Continue Reading →

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2023 Bankruptcy Alternative: Uniform Law On Assignments For Benefit Of Creditors?

Uniformity (photo by Marilyn Swanson) By: Donald L Swanson 2023 is the year that the need for a uniform state law on assignments for benefit of creditors became obvious.  And a Drafting Committee at the Uniform Law Commission began working in 2023 to create such a law. Here are some of the reasons why the need... Continue Reading →

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California Omits Insider Preferences From Its UVTA But Includes Them In Its ABC Statute . . . What’s With That?!!

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 →

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ABC Details In Illinois: Under Common Law Of Trusts

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 →

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ABCs: Judicial Supervision v. Availability of Courts to Resolve Disputes

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 →

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How the Common Law Of ABCs And Bankruptcy Work Together (In re Computer World)

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 →

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