Tag: Assignment for benefit of creditors

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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Many ABC Statutes Have Really-Cool Provisions–But Are Rarely Used (A Uniform Trust Code Remedy)

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 →

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Why A Uniform ABC Law Is Needed

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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When ABC Proceeding And Involuntary Bankruptcy Meet (In re Scandia)

Interrelationships? (Photo by Marilyn Swanson) By: Donald L Swanson The interrelationship between an assignment for benefit of creditors (“ABC”) proceeding and an involuntary bankruptcy filing, for the same debtor, is governed by various portions of the Bankruptcy Code.  But that relationship remains ill-defined, nonetheless. What follows is an attempt to summarize a bankruptcy court opinion dealing... Continue Reading →

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One Thing Wrong With ABC Laws: § 543(d)(2) Of The Bankruptcy Code (Global Safety Labs)

Problematic? (Photo by Marilyn Swanson) By: Donald L Swanson “[T]he bankruptcy court— . . . (2) shall excuse compliance . . . if . . . an assignee for the benefit of the debtor’s creditors . . . was appointed or took possession more than 120 days before the date of the filing of the petition,... Continue Reading →

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