uniform assignment; benefit of creditors
SB1252 adds a new chapter to Title 44 adopting the Uniform Assignment for Benefit of Creditors Act in Arizona. The bill creates a statutory framework for a debtor to transfer all of its assets to an independent assignee, who then administers and liquidates those assets for the benefit of creditors outside of bankruptcy. It defines key terms, sets eligibility rules for assignees, requires a written assignment agreement, and establishes procedures for notice to creditors, filing and recording of interests, proof-of-claim submission, claim allowance and dispute resolution, and final accounting.
The measure also gives the assignee broad powers to operate the business temporarily, collect or sell assets, pursue claims, avoid certain transfers, and distribute proceeds according to a priority scheme. It addresses secured claims, administrative expenses, wage claims, federal priority claims, subordination agreements, interstate assignments, court supervision, successor assignees, and limits on how much the agreement may vary the statute. The chapter applies only to assignments made on or after the effective date.
The bill creates a new Arizona statutory regime for assignments for the benefit of creditors, adding Chapter 6 to Title 44 and establishing rights, duties, and procedures that will govern out-of-court insolvency liquidations for qualifying individuals and organizations with Arizona connections. It affects debtors, creditors, assignees, secured lenders, employees with wage claims, and courts by specifying how assets are transferred, how claims are filed and paid, and how disputes are handled. It also interacts with existing property, secured transactions, recording, fraudulent transfer, and electronic-signature laws.
The bill appears to have had broadly favorable support throughout the legislative process. It passed the Senate Finance Committee 6-0, the Senate third reading 29-0, the House Commerce Committee 10-0, and the House third reading 48-1, and it was ultimately signed by the governor. The committee status indicators also show favorable recommendations, suggesting the measure was viewed as a technical or uniform-law update rather than a controversial policy change.
No committee transcript was provided, and the recorded votes show little opposition, so there is no clear evidence of major controversy. The most likely areas of policy sensitivity are the bill’s creation of a nonbankruptcy liquidation process, the assignee’s broad authority to operate and dispose of assets, the treatment of secured creditors and avoidance powers, and the limits on creditor participation through proof-of-claim procedures. However, the available record does not identify any organized opposition or specific disputed provisions.