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Abstract: 

This article examines the evolving landscape of Assignments for the Benefit of Creditors as a state-law alternative to federal bankruptcy proceedings. It explores the increasing appeal of ABCs for distressed businesses seeking a faster, more flexible, and less stigmatized liquidation process. In light of the Uniform Law Commission’s July 2025 approval of the Uniform Assignment for Benefit of Creditors Act (“ABC Act”), this article provides a comprehensive overview of the ABC process, compares its advantages and limitations relative to bankruptcy, and analyzes the ABC Act’s key features — including fiduciary duties, claims procedures, and limited court involvement. The authors assess the anticipated impact of the ABC Act on state practices, highlighting its potential to harmonize disparate legal frameworks, expand access for multi-state debtors, and enhance predictability for creditors. Ultimately, the article argues that the ABC Act offers a modernized, business-friendly restructuring tool that may reshape the future of non-bankruptcy liquidations across the United States.

Keywords: Assignments for the Benefit of Creditors (“ABCs”); ABCs vs. Bankruptcy Proceedings

Affiliations:  1: Foley & Lardner LLP; 2: Foley & Lardner LLP.