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Chapter 0029 - 572R - S Ver of SB1252
Senate Engrossed
uniform assignment;
benefit of creditors
State of Arizona
Senate
Fifty-seventh Legislature
Second Regular Session
2026
CHAPTER 29
SENATE BILL 1252
AN
ACT
amending title 44, Arizona Revised
Statutes, by adding chapter 6; relating to assignment for benefit of creditors.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 44, Arizona Revised Statutes,
is amended by adding chapter 6, to read:
CHAPTER 6
UNIFORM
ASSIGNMENT FOR BENEFIT OF CREDITORS ACT
ARTICLE 1. GENERAL PROVISIONS
START_STATUTE
44-601.
Definitions
In this chapter, unless the context otherwise
requires:
1. "Affiliate" means any of
the following:
(
a
) A person
that, directly or indirectly, owns, controls or holds, with power to vote,
twenty percent or more of the outstanding voting interests of another person,
other than a person that holds the interests either:
(
i
) In a
fiduciary or agency capacity without sole discretionary power to vote the
interests.
(
ii
) solely to
secure a debt, if the person has not in fact exercised the power to vote.
(
b
) A person
with twenty percent or more of the person's outstanding voting interests
directly or indirectly owned, controlled or held, with power to vote, by
another person.
(
c
) a person
whose business is operated under a lease or operating agreement by another
person, or a person substantially all of whose assets are controlled by the
other person.
(
d
) a person
that operates the business or substantially all the assets of another person
under a lease or operating agreement.
2. "Asset":
(
a
) Means a
legal or equitable interest in property of an assignor, regardless of the
person holding or in possession, custody or control of the property or where
the property is located.
(
b
) Does not
include either of the following:
(
i
) A legal or
equitable interest in property that is restricted from assignment if the
restriction is effective under other law, unless the other law allows
assignment with the consent of another person and the person consents to the
assignment in a manner allowed by the other law.
(
ii
) if the
assignor is an individual, a legal or equitable interest in property to the
extent it is exempt from legal process under other law.
3. "Assigned asset" means
an asset transferred under an assignment.
4. "Assignee" means a
person to which assets are transferred under an assignment.
5. "Assignment" means a
transfer by a person of all the person's assets to another person for the
benefit of the transferor's creditors.
6. "Assignment agreement"
means an agreement that transfers or provides for a transfer of all the
assignor's assets.
7. "Assignment estate"
means the assets held at a given time by the assignee under an assignment.
8. "Assignor" means a
person whose assets are transferred under an assignment.
9. "Claim" means a
creditor's right to payment or to an equitable remedy, regardless of whether
the right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or
unsecured.
10. "Cohabitant" means each
of two individuals who are not married to each other and who live together as a
couple after each has reached the age of majority or been emancipated.
11. "Creditor" means a
person that has a claim against an assigned asset or the assignor.
12. "Electronic" means
relating to technology having electrical, digital, magnetic, wireless, optical,
electromagnetic or similar capabilities.
13. "Good faith" means
honesty in fact and the observance of reasonable commercial standards of fair
dealing.
14. "Insider" includes:
(
a
) In the case
of an individual:
(
i
) A relative
of the individual.
(
ii
) A
partnership or limited liability company in which the individual is a general partner
or managing member.
(
iii
) An
organization of which the individual is a director, officer or person in
control.
(
b
) In the case
of an organization:
(
i
) a director,
officer, manager or other person in control of or with controlling equity
interest in the organization.
(
ii
) a
partnership or limited liability company in which the organization is a general
partner or managing member.
(
iii
) A general
partner or managing member of the organization.
(
iv
) a relative
of a general partner, managing member, director, officer, manager or other
person in control of or with controlling equity interest in the organization.
(
c
) an
affiliate.
(
d
) a managing
agent of an organization.
15. "Lien" means an
interest in an asset that secures payment or performance of an obligation.
16. "Organization" means a
person other than an individual.
17. "Perfected lien" means
a lien on either:
(
a
) Real
property other than fixtures on which a bona fide purchaser of the property
cannot acquire an interest superior to the interest of the lienholder.
(
b
) Fixtures or
property other than real property on which a creditor cannot acquire a lien by
attachment, levy or the like that is superior to the interest of the
lienholder.
18. "Person":
(
a
) Means an
individual, estate, business or nonprofit entity, government or governmental
subdivision, agency or instrumentality or other legal entity.
(
b
) Includes a
protected series, however denominated, of an entity if the protected series is
established under law that limits, or limits if conditions specified under law
are satisfied, the ability of a creditor of the entity or of any other protected
series of the entity to satisfy a claim from assets of the protected series.
19. "Proof of claim" means
a record a creditor submits to an assignee to evidence the creditor's claim.
20. "Record" means
information either:
(
a
) Inscribed
on a tangible medium.
(
b
) stored in
an electronic or other medium and retrievable in perceivable form.
21. "Relative" means an
individual related by affinity or consanguinity within the third degree or a
cohabitant.
22. "Security interest"
means a lien created by an agreement.
23. "Send", in connection
with a record or notification, means either:
(
a
) To deposit
in the mail, deliver for transmission or transmit by any other usual means of
communication, with postage or cost of transmission provided for, addressed to
any address reasonable under the circumstances.
(
b
) To cause
the record or notification to be received within the time it would have been
received if properly sent under subdivision (
a
) of this
paragraph.
24. "State":
(
a
) Means a
state of the United States, the District of Columbia, Puerto Rico, the United
States Virgin Islands or any other territory or possession subject to the
jurisdiction of the United States.
(
b
) Includes a
federally recognized Indian tribe.
25. "Transfer" means
disposing of or parting with an asset or with an interest in an asset,
regardless of whether the disposition or parting is indirect, conditional or
involuntary.
END_STATUTE
START_STATUTE
44-602.
Scope
This chapter applies to an assignment made by an
assignor that is:
1. An organization whose principal
place of business is in this state.
2. An organization whose internal
affairs are governed by other laws of this state.
3. An individual whose principal
residence is in this state.
4. An organization that is wholly
owned, directly or indirectly, by an assignor that satisfies paragraph 1, 2 or
3 of this section.
5. An organization that:
(
a
) Is partly
owned, directly or indirectly, and controlled by an assignor that satisfies
paragraph 1, 2 or 3 of this section.
(
b
) Has no
place of business or employees.
(
c
) Relies on
the services the organization receives from an assignor that satisfies
paragraph 1, 2 or 3 of this section.
END_STATUTE
START_STATUTE
44-603.
Requirements for assignee and assignment agreement
A. An assignee must be a person that:
1. Is not a creditor, affiliate or
insider of the assignor.
2. Is not an affiliate or insider of
a creditor of the assignor.
3. Does not have a claim against the
assignment estate, other than a claim for fees and expenses to be paid under
the assignment agreement.
4. Does not have a material financial
interest in the outcome of the assignment, other than a claim for fees and
expenses to be paid under the assignment agreement.
5. Does not hold an equity interest
in the assignor other than a noncontrolling interest in a publicly traded
company.
6. Is not an affiliate of a person
that fails to satisfy paragraph 1, 2, 3, 4 or 5 of this subsection.
b. A person that satisfies subsection
A of this section is not precluded from being an assignee merely because the
person performed services for the assignor before the assignment.
c. An assignment agreement must be in
a record signed by the assignor and the assignee. The record must:
1. State the name and address of the
assignor and of the assignee.
2. Transfer or provide for a transfer
of all the assignor's assets.
3. Describe the assigned assets in
sufficient detail to identify the assets.
4. Provide for the distribution of
the assignment estate.
5. Describe the fees to be charged by
the assignee in connection with the assignment, including the basis on which
they are to be calculated.
6. Include a representation by the
assignor, under penalty of perjury, that the assignor is assigning all the
assignor's assets.
d. If an assignee relies in good
faith on the assignor's representation made under subsection C, paragraph 6 of
this section, all the assignor's assets are deemed to be assigned, even if the
representation is inaccurate.
END_STATUTE
START_STATUTE
44-604.
Effect of assignment; assignment agreement; effective date
A. An assignee obtains the rights,
title and interests of the assignor in the assigned assets.
b. If the assignor is an
organization, an assignee obtains the rights, title and interests of the
assignor in assets acquired after the assignment.
c. Except as provided in Section
44-609, subsection B, paragraph 12, an assignee takes each assigned asset
subject to an existing interest in the asset held by another person.
d. An assignee holds the assigned
assets subject to the assignee's duties under Section 44-608.
e. An assignment is subject to other
laws under which the assignment may be fraudulent or otherwise voidable.
f. The effective date of an
assignment agreement is the date the agreement is signed by the last party to
the agreement that is required to sign the agreement unless a later date is
identified in the agreement as the effective date.
END_STATUTE
START_STATUTE
44-605.
Filing, recording and title transfer requirements; definition
A. An assignee of a legal or
equitable interest in personal property may file a financing statement in the
filing office of:
1. This state established for the
purposes of Section 47-9501, subsection A, paragraph 2.
2. Any other state in which either:
(
a
) the
assignor would be located under Section 47-9307 if the assignor were a debtor
for the purpose of that section.
(
b
) an asset of
the assignment estate may be located.
B. A financing statement filed under
subsection A of this section must indicate that it is filed in connection with
an assignment.
C. When filing a financing statement
under subsection A of this section, the assignee must either:
1. Attach a copy of the assignment
agreement to the financing statement.
2. State on the financing statement
that a copy of the assignment agreement is available on request to the
assignee.
D. A financing statement filed under
subsection A of this section may either:
1. Designate the assignor as
"debtor" and the assignee as "secured party".
2. Use the terms "assignor"
and "assignee" or words of similar import.
E. The filing of a financing
statement under subsection A of this section is not itself a factor in
determining whether an asset secures an obligation.� The rights of the assignee
under the assignment are not affected if the assignee does not file a financing
statement under subsection A of this section.
F. An
assignee of a legal or equitable interest in real property shall record the
assignment of the interest or notice of the assignment under the real estate
recording law of the jurisdiction where the property is located.
G. An assignee shall comply with
other laws governing the transfer of title to an asset.
H. By signing an assignment
agreement, the assignor authorizes the assignee to take the actions required by
this section.
END_STATUTE
I. For the purposes of this section,
"financing statement" has the same meaning prescribed in Section
47-9102, subsection A, paragraph 39.
START_STATUTE
44-606.
Notification to creditors
A. Unless a creditor waives in a
signed record the right to notification, an assignee shall send a notification
of the assignment to each creditor known to the assignee within a reasonable
time not to exceed thirty days after the effective date of the assignment
agreement.
b. The notification must:
1. Be in a record signed by the
assignee.
2. Include the assignee's name,
address and other contact information reasonably necessary to communicate with
the assignee.
3. Provide reasonable instructions
for submitting a proof of claim using the method established by the assignee
under Section 44-608, subsection B, paragraph 5.
4. Identify the date established
under Section 44-608, subsection B, paragraph 6 by which each creditor whose
claim is not otherwise allowed without a timely proof of claim under this
chapter must submit a proof of claim.
C. An assignee shall use reasonable
means to provide the information in subsection B of this section to unknown
creditors, including by any means the assignor regularly used to either:
1. Provide information to the
assignor's creditors.
2. Communicate information about the
assignor, other than advertising, to the public.
END_STATUTE
START_STATUTE
44-607.
Duties of assignor
A. Subject to Section 44-622, an
assignor has a duty to take all reasonable actions necessary for the assignee
to administer the assignment, the assigned assets and the assignment estate.
b. In furtherance of the duty under
subsection A of this section, the assignor shall:
1. Preserve and turn over to the
assignee the assigned assets in the assignor's possession or control.
2. Provide to the assignee
information reasonably necessary to administer the assignment, the assigned
assets and the assignment estate.
3. Sign any record reasonably
necessary to transfer an assigned asset and comply with any notarization
required under law.
4. Designate, and provide the
assignee with the name, address and other contact information reasonably
necessary to communicate with, an appropriate person willing and able to act as
a representative on behalf of the assignor as may be reasonably necessary to
administer the assignment, the assigned assets and the assignment estate.
5. If the assignment includes a legal
or equitable interest in real property or titled personal property, cooperate
with the assignee in taking actions under Section 44-605.
6. On or as soon as practicable after
the effective date of the assignment agreement, provide the assignee all of the
following:
(
a
) A list of
all assets.
(
b
) A list of
all the assignor's employees, including those whose employment is terminated in
connection with the assignment.
(
c
) a list of
all the assignor's known creditors, including for each creditor the creditor's
address and other contact information reasonably necessary to communicate with
the creditor.
7. verify under penalty of perjury
the accuracy of the lists required under paragraph 6 of this subsection.
8. with respect to a legal or
equitable interest in property restricted from assignment, cooperate with the
assignee to obtain consent from a person whose consent to assign the interest
is necessary under other law.
9. Provide assistance to the assignee
as required by the assignment agreement.
C. The duties in this section also
apply to a representative designated under subsection b, paragraph 4 of this
section.
END_STATUTE
START_STATUTE
44-608.
Duties of assignee
A. Subject to Section 44-622, an
assignee has a fiduciary duty to the assignment estate for the benefit of
creditors:
1. of loyalty, including the duty to
manage the assignment in good faith.
2. to use reasonable care to maximize
distributions under Section 44-614.
3. to wind up the assignment under
Section 44-618 in a manner compatible with the best interests of the assignment
estate and creditors.
b. Without limitation on the duties
under subsection a of this section, and subject to Section 44-622, the assignee
has a duty to:
1. maintain a separate deposit
account for monies related to the assignment.
2. collect on or dispose of each
assigned asset, unless the assignee determines it is more economically
efficient to abandon the asset.
3. prepare and retain appropriate
business records, including a record of each receipt, disbursement and
collection on or disposition of an assigned asset.
4. pay administrative expenses of the
assignment estate to the extent the assignment estate has sufficient
unencumbered assets.
5. establish a method that is
reasonably designed to permit a creditor to submit a proof of claim.
6. establish a single date by which
creditors whose claims are not otherwise allowed without timely proofs of claim
under this chapter must submit proofs of claim, which must be one hundred
twenty days after the effective date of the assignment agreement.
7. unless a claim would receive
minimal or no distribution without regard to the claim's validity or asserted
priority, examine the validity and priority of claims against the assignment
estate and, if necessary, consult with the representative designated by the
assignor under Section 44-607, subsection B, paragraph 4.
8. At least every six months, provide
to each creditor a summary of the assets, liabilities and expenses of the
assignment estate.
9. comply with all requirements of
the Internal Revenue Service and state and local taxing authorities.
10. send a notification to each
creditor of the assignee's compensation and any change in the method of
determining the assignee's compensation from the method provided in the
assignment agreement.
11. send a final accounting under
Section 44-618, subsection A.
12. comply with the other
requirements imposed on the assignee under this chapter.
END_STATUTE
START_STATUTE
44-609.
Powers of assignee
A. An assignee has the powers
necessary or appropriate to perform the assignee's duties.
b. Unless the assignment agreement
expressly provides otherwise, the assignee has power to:
1. operate an existing business that
uses an assigned asset, including preservation of the asset and collection on,
or the sale, lease, license or other disposition of, the asset.
2. incur secured or unsecured debt
and pay expenses incidental to the exercise of the power under paragraph 1 of
this subsection.
3. assert a right, claim, cause of
action or defense the assignor could have asserted that relates to the
assignment estate.
4. engage professionals, including a
professional previously engaged by the assignor, to give advice, to prosecute
or defend litigation or for other purposes as the assignee considers
appropriate, and pay professionals reasonable fees for services from the
assignment estate.
5. collect on, or sell, lease,
license or otherwise dispose of, an asset of the assignment estate regardless
of whether the asset is subject to a lien or other encumbrance.
6. exercise a right to redeem an
asset of the assignment estate that is subject to a mortgage, deed of trust,
security interest or other encumbrance.
7. settle a matter involving a debtor
of the assignor.
8. prosecute or defend a litigation
pending on the effective date of the assignment agreement in favor of or
against the assignor in the manner and with the same effect as the assignor
could have done if the assignment had not been made.
9. recover an asset in the manner and
with the same effect as the assignor could have done if the assignment had not
been made.
10. settle claims against the
assignment estate.
11. abandon an assigned asset.
12. subject to subsections C and E of
this section, avoid a transfer or the incurrence of an obligation which a
creditor that has filed a proof of claim could have avoided under other law if
the assignment had not been made.
13. invest monies, subject to
applicable prudent investor standards under other law.
C. The power under subsection B,
paragraph 12 of this section is exclusive to the assignee with respect to a
creditor that submits a proof of claim. A recovery by the assignee in the
exercise of this power must be for the benefit of the assignment estate but may
not exceed the amount, asset or other value the creditor could have obtained by
the avoidance.
d. For the purpose of exercising the
assignee's power under subsection B, paragraph 12 of this section, exercising a
voidable transaction remedy, or otherwise establishing the priority of the
assignee's interest, an assignee has a lien on the assignment estate and the
status of:
1. a lien creditor prescribed in
section 47-9102, subsection A, paragraph 52, subdivision (
b
) as to an asset that is a legal or equitable interest in personal
property or fixtures.
2. a bona fide purchaser under
section 33-416 as to an asset that is a legal or equitable interest in real
property, other than fixtures, located in this state.
3. a bona fide purchaser under the
law of another state as to an asset that is a legal or equitable interest in
real property, other than fixtures, located in the other state.
E. An assignee's power under
subsection B, paragraph 12 of this section to avoid a transfer made before the
effective date of the assignment agreement, under or in connection with a swap
agreement, securities contract, commodity contract, forward contract,
repurchase agreement or master netting agreement, is limited to the extent a
trustee would not have the power to avoid the transfer under the United States
Bankruptcy Code (11 United States Code sections 101 through 112).
F. An assignee shall exercise the
powers under this section consistent with the assignee's fiduciary duty under
Section 44-608, subsection A.
END_STATUTE
START_STATUTE
44-610.
Allowed claim
A. An
assignee shall allow a creditor's claim if:
1. the creditor submits a proof of
claim in compliance with Section 44-612.
2. the assignee does not dispute the
claim under Section 44-611 before final distribution.
B. An assignee may either:
1. allow a claim, pay a known
liquidated claim or accept a notice to the assignee of a claim received by the
date established by the assignee under Section 44-608, subsection B, paragraph
6 even if the creditor does not submit a proof of claim.
2. allow and pay a claim evidenced by
a late-filed proof of claim, if the assignee determines there is a reasonable
basis for excusing the late filing.
C. Any unsecured portion of an
allowed claim shall be valued as of the effective date of the assignment
agreement.
d. A creditor's claim is allowed if
the creditor succeeds in a dispute under Section 44-611, subsection B.
e. Subject to subsection F of this
section, after expiration of the time for submitting a proof of claim, the
assignee shall create a complete list of creditors that have submitted a proof
of claim in compliance with Section 44-612. For each creditor's claim, the list
must state both of the following:
1. the amount of the claim, if the
amount is known to the assignee.
2. whether the claim is secured or
unsecured and, if secured, describe the collateral for the claim.
F. If a class of creditors will
receive no distribution on account of allowed claims, the assignee shall send a
notice in a record to each creditor in that class that the creditor will
receive no distribution instead of the list required in subsection e of this
section.
g. If requested by a creditor or
other party with an interest in the assignment estate, the assignee shall
provide the list created under subsection E of this section to the person
making the request to the extent allowed by privacy laws and subject to any
privacy safeguards the assignee determines in the assignee's business judgment
are reasonably necessary.
END_STATUTE
START_STATUTE
44-611.
Disputed and disallowed claims
A. An assignee may dispute a
creditor's claim before final distribution by sending notification in a record
stating the nature of the assignee's dispute to the creditor.
b. If a dispute cannot be resolved
consensually, the assignee may commence a proceeding under Section 44-620 to
disallow the claim. The assignee must commence the proceeding before final
distribution under Section 44-614.� If the proceeding is not filed before final
distribution, the assignee shall allow the claim under Section 44-610.
c. An assignee shall create a
dollar-for-dollar reserve for the estimated amount of the potential
distribution on a disputed claim.
d. Subject to subsection B of this
section, an assignee shall disallow a claim for reimbursement or contribution
of a person that is liable with the assignor on, or that has secured, the
claim, to the extent of any of the following:
1. the claim against the assignment
estate is disallowed.
2. the claim for reimbursement or
contribution is contingent as of the time of allowance or disallowance.
3. the person asserts a right of
subrogation to the rights of a creditor.
E. A claim for reimbursement or
contribution of a person liable with the assignor on, or that has secured, the
claim that becomes fixed after the effective date of the assignment agreement
shall be determined, and shall be allowed or disallowed, subject to subsection
b of this section, as if the claim had become fixed before the effective date
of the assignment agreement.
F. An assignee may reconsider the
assignee's decision to allow or disallow a claim for cause.� If a reconsidered
claim is allowed under Section 44-610, before the assignee makes additional
payments or transfers to other creditors that are equal or junior in priority
under Section 44-614 to the reconsidered claim, the creditor with the
reconsidered claim shall receive a payment or transfer in an amount
proportionate in value to the payments or transfers already received by the
other creditors.� This subsection does not modify the assignee's right under
other law to recover from a creditor an excess payment or transfer made to the
creditor.� If a reconsidered claim is disallowed, the assignee shall comply
with subsections B and C of this section.
END_STATUTE
START_STATUTE
44-612.
Proof of claim
A. A proof of claim must:
1. state the name, address and other
contact information reasonably necessary to communicate with the creditor.
2. state the amount of the claim.
3. briefly state the nature of the
claim.
4. identify any asset of the
assignment estate securing the claim.
5. be signed by the creditor under
penalty of perjury.
6. include a copy of a record, if
any, on which the claim is based.
7. be submitted using the method
established under Section 44-608, subsection B, paragraph 5.
8. be submitted by the date
established by the assignee under Section 44-608, subsection B, paragraph 6.
B. A proof of claim submitted in
compliance with this section is prima facie evidence of the validity and amount
of the claim.
C. The submission by a creditor of a
proof of claim in compliance with this section constitutes the creditor's:
1. consent to the jurisdiction of the
court under Section 44-620.
2. assignment to the assignee of any
right of the creditor to bring a voidable transaction action relating to the
creditor's claim.
END_STATUTE
START_STATUTE
44-613.
Rights of transferees
A. An assignee's disposition of an
asset:
1. transfers to a transferee for
value all of the assignee's rights in the asset.
2. discharges the assignee's lien
and, to the extent the assignment creates a security interest in favor of the
assignee, the assignee's security interest.
3. discharges any subordinate
security interest or other lien subordinate to the assignee's lien.
B. A transferee that acts in good
faith takes free of the rights and interests described in subsection A of this
section, even if the assignee fails to comply with this chapter or the
requirements of a judicial proceeding.
C. If a transferee does not take free
of the rights and interests described in subsection A of this section, the
transferee takes the asset subject to all of the following:
1. the assignee's rights in the
assets of the assignment estate.
2. the assignee's lien and, if
applicable, security interest.
3. any other security interest or
other lien.
D. Unless otherwise provided in a
record, any warranty arising by operation of other law is disclaimed to the
extent permitted by other law.
E. If a subordinate security interest
or other lien is discharged under this section, the assignee may file a record
with the official or office responsible for maintaining an official filing,
recording, registration or certificate-of-title system covering the asset
secured by the security interest or other lien.� The record must state that the
security interest or other lien is discharged as a subordinate security
interest or other lien in connection with a disposition under an assignment for
the benefit of creditors of the assignor whose asset is subject to the security
interest or other lien.
END_STATUTE
START_STATUTE
44-614.
Distributions; definition
A. Except as provided in Section
44-615, the assignee shall pay claims from the assignment estate allowed under
Section 44-610 in the order of priority stated in this section.
B. Unless otherwise agreed between
the assignee and a protected secured creditor, before distributions under
subsections C, D, E and F of this section and in accordance with the priorities
of creditors with liens under other law, the protected secured creditor shall
receive the asset or the proceeds from the collection on or disposition of the
asset to the extent of the value of the protected secured creditor's interest
in the asset, less the assignee's reasonable and necessary expenses of preserving
or disposing of the asset to the extent the expenses benefit the protected
secured creditor and are incurred with the protected secured creditor's consent
or acquiescence.� The protected secured creditor has an unsecured claim under
subsection F, paragraph 2 of this section for the amount of the claim that
remains after deducting the amount or value of an asset the protected secured
creditor receives under this subsection.� To the extent a claim is secured by
an asset the value of which, after the deductions provided under this
subsection, is greater than the amount of the claim, the protected secured
creditor may receive interest on the claim and any reasonable fees, costs or
charges provided for under the agreement or other law under which the claim
arose.
C. After the distributions under
subsection B of this section, the assignee shall pay the necessary costs of the
administration of the assignment estate.� The costs include:
1. fees and reimbursements of the
expenses of the assignee and any professionals engaged by the assignee.
2. post-assignment taxes incurred by
the assignee.
3. post-assignment rent incurred by
the assignee in occupying premises on which assets of the assignment estate are
located or the business of the assignor is conducted.
4. post-assignment lease payments
incurred by the assignee in renting personal property used in the business of
the assignor.
5. amounts required to be paid under
the assignment agreement for expenses of winding up the assignment under
Section 44-618.
D. After the distributions under
subsections B and C of this section, the assignee shall pay claims entitled to
priority under federal law, including under 31 United States Code section 3713,
from the assignment estate.
E. After the distributions under
subsections B, C and D of this section, the assignee shall pay claims from the
assignment estate for wages, salaries or commissions earned not more than one
hundred eighty days before the earlier of the effective date of the assignment
agreement or the cessation of the assignor's business.� Payment shall be
limited to the greater of either of the following:
1. the amount of the claim allowed as
a priority claim ahead of claims of other unsecured creditors under the United
States Bankruptcy Code (11 United States Code Sections 101 through 112).
2. the amount allowed as a priority
claim ahead of claims of other unsecured creditors under applicable
non-bankruptcy law.
F. After the distributions under
subsections B, C, D and E of this section, each creditor shall receive a
distribution of the assets of the assignment estate in the following order of
priority:
1. unsecured claims entitled to
priority ahead of claims of other unsecured creditors under other law.
2. unsecured claims not entitled to
priority.
G. If the assets available for
distribution to claims with equal priority under subsection F of this section
are insufficient to pay the total amount of the claims with that priority, each
creditor with a claim with that priority shall receive a pro rata distribution
of the available assets based on the proportion the amount of the creditor's
claim bears to the total amount of the claims with that priority.
H. If the claims entitled to the
distribution under subsections B, C, D, E and F of this section are paid in
full, the residue shall be distributed to allowed claims evidenced by a
late-filed proof of claim, other than a late-filed claim allowed by the
assignee under Section 44-610, subsection B, paragraph 2, and, after the
allowed claims evidenced by a late-filed proof of claim have been paid in full,
as provided in the assignment agreement.
I. An assignee may make interim
distributions after considering future expenses and the reserves for disputed
claims established under Section 44-611, subsection C.
J. For the purposes of this section,
"protected secured creditor" means a secured creditor whose lien:
1. is a perfected lien.
2. cannot be avoided by the assignee
under Section 44-609, subsection B, paragraph 12.
3. is not subordinate to the
assignee's lien.
END_STATUTE
START_STATUTE
44-615.
Claim subordination
A. A subordination agreement is
enforceable under this chapter to the same extent the agreement is enforceable
under other law.
B. Subject to subsection c of this
section, the following claims are subordinate to a claim or interest that is
senior or equal in priority to a claim or interest represented by a security or
other equity interest in the assignor or an affiliate of the assignor:
1. a claim arising from rescission of
a purchase or sale of the security or other equity interest.
2. a claim for damages arising from
the purchase or sale of the security or other equity interest.
3. a claim for reimbursement or
contribution allowed on account of the rescission or damage claim.
C. If the security is common stock or
another common equity interest, a claim subject to subordination under
subsection B of this section has the same priority as common stock or another
common equity interest.
END_STATUTE
START_STATUTE
44-616.
Liability
A. An assignor is not personally
liable for an act or omission by the assignee.
b. An assignee is not personally
liable for an act or omission by the assignor.
c. A representative designated by an
assignor under Section 44-607, subsection B, paragraph 4 is exculpated to the
same extent as a person acting on behalf of the assignor under other law had
there been no assignment, except for an act or omission resulting from the
representative's gross negligence or wilful misconduct.
D. A term of an assignment agreement
relieving the assignee of liability is unenforceable to the extent the
agreement relieves the assignee of liability for an act or omission committed
in bad faith or with reckless indifference to the purposes of the assignment or
the interests of the creditors of the assignment estate.
E. Except as provided in subsection F
of this section, an assignee is personally liable for breach of a fiduciary
duty under Section 44-608, subsection A.� If the assignee is liable, both of
the following apply:
1. the assignee is personally liable
to a creditor for an individualized harm to the creditor if the harm is not
shared by all creditors or a class of creditors.
2. the assignee is personally liable
to the assignment estate for a harm shared by all creditors or a class of
creditors.
F. An assignee is not liable if, in
the performance of the assignee's duties and exercise of the assignee's powers,
the assignee relies in good faith on any of the following:
1. a record of the assignor.
2. information, an opinion, a report
or a statement presented to the assignee by the assignor's officer or employee,
a committee of the assignor's board of directors, an independent director or
manager of the assignor or another representative of the assignor.
3. information, an opinion, a report
or a statement presented to the assignee by another person that has been
selected with reasonable care by or on behalf of the assignee as to a matter
the assignee reasonably believes is within the other person's professional or
expert competence.
END_STATUTE
START_STATUTE
44-617.
Assignee removal; successor assignee
A. The assignor or a creditor may
request a court of competent jurisdiction in this state to remove the assignee,
if the assignor or creditor has a reasonable belief that grounds for removal
exist under subsection b of this section.
b. After a request under subsection A
of this section or on the court's initiative in an action pending before the
court under Section 44-620, the court may remove an assignee either:
1. for cause, including the
assignee's fraud, dishonesty, incompetence, gross mismanagement or failure to
comply with this chapter.
2. if removal of the assignee best
serves the interests of the creditors.
C. After an assignee resigns, or is
removed, dies, or becomes incapacitated, a successor assignee provided for in
the assignment agreement becomes the assignee, unless the successor assignee is
not eligible to be an assignee under Section 44-603, subsection A or is subject
to removal under subsection b of this section.� A court shall appoint a
successor assignee if either:
1. the assignment agreement does not
provide for a successor assignee.
2. the successor assignee provided
for in the assignment agreement is ineligible to be an assignee under Section
44-603, subsection A or is subject to removal under subsection B of this
section.
D. Except as provided in Section
44-616, an assignee WHO resigns, or is removed, dies, or becomes incapacitated,
is discharged from the assignee's duties under this chapter when the assignee,
or a representative of a deceased or incapacitated assignee:
1. accounts for and turns over to the
successor assignee all assets of the assignment estate.
2. submits to creditors a report
summarizing the receipts and disbursements made during the service of the
assignee.
E. Subject to an applicable
privilege, a court may order an attorney, accountant or other person that has
information in a record relating to the assignment estate or the assignor's
financial affairs to turn over or disclose the record to the successor
assignee.
END_STATUTE
START_STATUTE
44-618.
Winding up
A. On completion of an assignee's
duties, the assignee shall send a creditor whose claim is allowed under Section
44-610, and not satisfied in full, a final accounting sufficient to inform the
creditor of all material aspects of the assignment, including:
1. a description of the actions taken
by the assignee under the assignment.
2. a summary of the assets received
by the assignee at the commencement of the assignment and the assets received
by the assignee during the assignment.
3. a summary of disbursements made by
the assignee during the assignment for the purpose of administering the
assignment estate, including the fees charged by the assignee, and payments to
professionals, for rent and for business purchases.
4. a summary of collections and
dispositions of assets by the assignee.
5. a summary of distributions made or
proposed to be made by the assignee for creditor claims.
6. a description of additional work
to be done by the assignee to complete the administration of the assignment
estate and the distributions under Section 44-614.
7. other information considered
reasonably necessary by the assignee.
B. Except as otherwise provided in
the final accounting or if the assignee has not fulfilled the assignee's duties
under this chapter, the assignee is discharged from the assignee's duties under
this chapter when the assignee sends the final accounting and distributes all
the assets of the assignment estate.
C. If the final accounting describes
additional work under subsection a, paragraph 6 of this section, the assignee
shall exercise the powers appropriate to complete the work.
END_STATUTE
START_STATUTE
44-619.
Interstate matters
A. Subject to subsection B of this
section, an assignment made under the law of another state must be recognized
and enforced on an issue if the result for the issue would be substantially
similar to the result for the issue if the assignment had been made under this
chapter.
B. If a claim for wages, salaries or
commissions or a claim of a governmental unit exists in another state, for the
purpose of determining the priority of the claim under Section 44-614,
subsection E, paragraph 2, the assignee shall use the amount asserted or
determined under the law of the other state.
C. If an assignee determines that a
creditor should receive the treatment the creditor would receive under an
assignment made under the law of another state, the assignee may treat the
creditor as the creditor would be treated in the other state.
END_STATUTE
START_STATUTE
44-620.
Court action
A. A court of competent jurisdiction
in this state may hear and resolve a matter involving the administration of an
assignment or the exercise of an assignee's powers and duties, including a
request for instructions or approval or to declare rights.
B. Without limiting the rights of the
assignee or a creditor or other interested person to request the court to hear
or resolve a matter under subsection A of this section, on request of the
assignee, the court may issue an order relating to the administration of the
assignment or the exercise of the assignee's powers and duties, including an
order for disposition of an asset or the incurrence of an obligation.
c. Acceptance of the assignment by
the assignee constitutes the assignee's consent to the jurisdiction of the
court.
END_STATUTE
START_STATUTE
44-621.
Ancillary assignee
A. Except as provided in other laws
of this state governing a person from another state serving as a fiduciary in
this state, a court of competent jurisdiction in this state may appoint a
person serving as an assignee in an assignment in another state, or the
person's nominee, as an ancillary assignee relating to assigned assets located
in this state or subject to the jurisdiction of a court in this state, if both:
1. the person or nominee would be
eligible to serve as an assignee under Section 44-603.
2. the appointment furthers the
person's possession, custody, control or disposition of an assigned asset under
the assignment in the other state.
B. The court may issue an order that
implements an order entered in another state appointing or directing an
assignee or otherwise concerning an assignment in the other state.
C. Unless the court orders otherwise,
an ancillary assignee appointed under subsection A of this section has the
rights, powers and duties of an assignee appointed under this chapter.
D. On notification in a record by an
ancillary assignee appointed pursuant to subsection A of this section, a person
in possession, custody or control of an assigned asset in this state, other
than a creditor holding a lien or a right of setoff or recoupment relating to
the asset, shall turn over the asset to the ancillary assignee.
END_STATUTE
START_STATUTE
44-622.
Provisions variable by agreement
A. Except as provided in this section
and Section 44-609, subsection B, the provisions of this chapter may not be
varied by agreement.
B. The duties under Section 44-607,
subsection A and section 44-608, subsection A may not be disclaimed by
agreement. An assignor and the assignee may determine by agreement the
standards measuring the fulfillment of the duties of the assignor under Section
44-607 and the assignee under Section 44-608 if the standards are not
manifestly unreasonable.
C. Except as provided in Section
44-616, subsection D, the assignment agreement may limit the assignee's
liability under Section 44-616 and may require the assignee be
indemnified by the assignment estate.
D. Except as provided under Section
44-606, subsection A, whenever this chapter requires an action to be taken
within a reasonable time, a time not manifestly unreasonable may be fixed by
agreement.
E. The assignment agreement may
provide for duties of the assignee in addition to those in this chapter.
END_STATUTE
START_STATUTE
44-623.
Uniformity of application and construction
In applying and construing this chapter, a court
shall consider the promotion of uniformity of the laws among states that enact
it.
END_STATUTE
START_STATUTE
44-624.
Relation to electronic signatures in global and national commerce
act
This chapter modifies, limits or supersedes the
Electronic Signatures in Global and National Commerce Act (15 United States
Code sections 7001 through 7031) but does not modify, limit or supersede 15
United States Code Section 7001(
c
), or authorize
electronic delivery of any of the notices described in 15 United States Code
Section 7003(
b
).
END_STATUTE
START_STATUTE
44-625.
Transitional provision
This chapter applies to an assignment made on or
after the effective date of this chapter.
END_STATUTE
APPROVED BY THE GOVERNOR APRIL 9, 2026.
FILED IN THE OFFICE OF THE SECRETARY OF STATE APRIL 9, 2026.