Concerning the "Uniform Assignment for Benefit of Creditors Act".
SB26-079 would enact Colorado’s version of the Uniform Assignment for Benefit of Creditors Act, creating a statutory framework for a debtor to transfer all of its assets to an independent assignee for administration and distribution to creditors. The bill defines key terms, limits who may serve as assignee, and requires a written assignment agreement that identifies the parties, transfers all assets, sets fees, and includes a sworn representation that all assets are being assigned.
The bill lays out a detailed process for administering the assignment estate. It requires notice to known creditors, establishes proof-of-claim procedures and deadlines, gives the assignee fiduciary duties to act in good faith and maximize creditor recoveries, and authorizes the assignee to operate the business, sell or collect assets, settle claims, hire professionals, and avoid certain transfers. It also sets rules for allowed and disputed claims, distribution priorities, court oversight, removal and replacement of assignees, final accounting, interstate recognition, and the relationship of the act to electronic-signature law.
If enacted, the bill would add a new Article 22 to Title 5 of the Colorado Revised Statutes and create a state-law alternative to bankruptcy for insolvent businesses or individuals that choose to make an assignment for the benefit of creditors. It would affect assignors, assignees, creditors, transferees, and courts by establishing filing/recording rules, creditor notice and claim procedures, distribution priorities, and fiduciary liability standards, while preserving the effect of other laws governing fraudulent transfers, secured interests, real property recording, and federal priority claims.
The available record shows no committee transcript or vote detail, so there is no documented floor or committee debate to gauge broad support or opposition. The bill’s structure suggests a policy preference for a more orderly, uniform, and creditor-protective insolvency process, but the only recorded action is that the Senate Committee on Business, Labor, & Technology postponed the bill indefinitely, indicating it did not advance out of committee.
The main points of potential contention are likely to be the scope of assignee powers, the extent of creditor protections, and the bill’s interaction with existing bankruptcy and secured-transactions law. Parties concerned about debtor control may object to the assignee’s authority to operate the business, incur debt, and avoid transfers, while creditors may focus on notice deadlines, claim-disallowance procedures, and distribution priorities. Another likely issue is whether the uniform act should be adopted in Colorado at all, given that it creates a parallel insolvency process outside federal bankruptcy court.