A bill for an act providing for an assignment of assets for the benefit of creditors, exempting the related tax on the transfer of real estate, and including effective date provisions. (Formerly SF 2213 .) Effective date: 01/01/2027.

Kim Reynolds
governor
Office of the Governor Chris Cournoyer
lt governor
June 02, 2026
The Honorable Paul Pate
Secretary of State of Iowa
State Capitol
Des Moines, Iowa 50319
Dear Mr. Secretary,
I hereby transmit:
Senate File 2497, an Act providing for an assignment of assets for the benefit of
creditors, exempting the related tax on the transfer of real estate, and including effective
date provisions.
The above Senate File is hereby approved on this date.
Kim Reynolds I
Governor of Iowa
cc: Secretary of the Senate
Clerk of the House
STATE CAPITOL DES MOINES, IOWA 50319 515.281.5211 WWW.GOVERNOR.IOWA.GOV
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Senate File 2497
AN ACT
PROVIDING FOR AN ASSIGNMENT OF ASSETS FOR THE BENEFIT OF
CREDITORS, EXEMPTING THE RELATED TAX ON THE TRANSFER OF REAL
ESTATE, AND INCLUDING EFFECTIVE DATE PROVISIONS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
DIVISION I
PRINCIPAL PROVISIONS
Section 1. NEW SECTION . 681A.1 Title.
This chapter may be cited as the "Uniform Assignment for
Benefit of Creditors Act
Senate File 2497, p. 2
Sec. 2. NEW SECTION . 681A.2 Definitions.
As used 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 as any of the following:
(1) In a fiduciary or agency capacity without sole
discretionary power to vote the interests.
(2) 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. a. "Asset" 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. "Asset" does not include any of the following:
(1) A legal or equitable interest in property restricted
from assignment if the restriction is effective under other
law, unless the other law permits assignment with the consent
of another person and the person consents to the assignment in
a manner permitted by the other law.
(2) 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.
Senate File 2497, p. 3
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 not married
to each other 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 any of the following:
a. In the case of an individual, any of the following:
(1) A relative of the individual.
(2) A partnership or limited liability company in which the
individual is a general partner or managing member.
(3) An organization of which the individual is a director,
officer, or person in control.
b. In the case of an organization, any of the following:
(1) A director, officer, manager, or other person in control
of or with controlling equity interest in the organization.
(2) A partnership or limited liability company in which the
organization is a general partner or managing member.
(3) A general partner or managing member of the
organization .
(4) A relative of a general partner, managing member,
Senate File 2497, p. 4
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 any of the following:
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. a, "Person" means an individual, estate, business
or nonprofit entity, government or governmental subdivision,
agency, or instrumentality, or other legal entity.
b. "Person" 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 that is any of the following:
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 any of the following:
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.
Senate File 2497, p. 5
b. To cause the record or notification to be received within
the time it would have been received if properly sent under
paragraph "a".
24. "Sign" means, with present intent to authenticate or
adopt a record by doing any of the following:
a. To execute or adopt a tangible symbol.
b, To attach to or logically associate with the record an
electronic symbol, sound, or process.
25. a. "State" 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. "State" includes a federally recognized Indian tribe.
26. "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.
Sec. 3. NEW SECTION . 681A.3 Scope.
This chapter applies to an assignment made by an assignor
that is any of the following:
1. An organization whose principal place of business is in
this state.
2. An organization whose internal affairs are governed by
other law of this state.
3. An individual whose principal residence is in this state.
4. An organization wholly owned, directly or indirectly, by
an assignor that satisfies subsection 1, 2, or 3.
5. An organization, if all of the following apply:
a. It is partly owned, directly or indirectly, and
controlled by an assignor that satisfies subsection 1, 2, or 3.
b. It has no place of business or employees.
c. It relies on the services the organization receives from
an assignor that satisfies subsection 1, 2, or 3.
Sec. 4. NEW SECTION . 681A.4 Requirements for assignee and
assignment agreement.
1. An assignee must be all of the following:
a. A person that is not a creditor, affiliate, or insider of
the assignor.
b. A person that is not an affiliate or insider of a
Senate File 2497 r p. 6
creditor of the assignor.
c. A person that does not have a claim against the
assignment estate, other than a claim for fees and expenses to
be paid under the assignment agreement.
d. A person that 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.
e. A person that does not hold an equity interest in the
assignor other than a noncontrolling interest in a publicly
traded company.
f. A person that is not an affiliate of a person that fails
to satisfy paragraph '“a", "b" , "c", "d", or "e".
2. A person that satisfies subsection 1 is not precluded
from being an assignee merely because the person performed
services for the assignor before the assignment.
3. An assignment agreement must be in a record signed by
the assignor and the assignee. The record must do all of the
following:
a. State the name and address of the assignor and of the
assignee.
b. Transfer or provide for a transfer of all the assignor's
assets .
c. Describe the assigned assets in sufficient detail to
identify the assets.
d. Provide for the distribution of the assignment estate.
e. Describe the fees to be charged by the assignee in
connection with the assignment, including the basis on which
they are to be calculated.
f. Include a representation by the assignor, under penalty
of perjury, that the assignor is assigning all the assignor's
assets .
4. If an assignee relies in good faith on the assignor's
representation made under subsection 3, paragraph '*f~ f all
the assignor's assets are deemed to be assigned, even if the
representation is inaccurate.
Sec. 5. NEW SECTION . 681A.5 Effect of assignment — - when
assignment agreement effective.
1. An assignee obtains the rights, title, and interests of
the assignor in the assigned assets.
Senate File 2497, p. 7
2. If the assignor is an organization, an assignee obtains
the rights, title, and interests of the assignor in assets
acquired after the assignment.
3. Except as provided in section 681A.10, subsection 2,
paragraph "J", an assignee takes each assigned asset subject to
an existing interest in the asset held by another person.
4. An assignee holds the assigned assets subject to the
assignee's duties under section 681A.9.
5. An assignment is subject to other law under which the
assignment may be fraudulent or otherwise voidable.
6. 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.
Sec. 6. NEW SECTION . 681A.6 Filing, recording, and title
transfer requirements.
1. In this section, ''"financing statement" has the same
meaning as defined in section 554.9102, subsection 1.
2. An assignee of a legal or equitable interest in personal
property shall file a financing statement in the filing office
of any of the following:
a. This state established for purposes of section 554.9501,
subsection 1, paragraph "b".
b. Any other state in which any of the following apply:
(1) The assignor would be located under section 554.9307 if
the assignor were a debtor for the purpose of that section.
(2) An asset of the assignment estate may be located.
3. A financing statement filed under subsection 2 must
indicate that it is filed in connection with an assignment.
4. When filing a financing statement under subsection 2, the
assignee must do any of the following:
a. Attach a copy of the assignment agreement to the
financing statement.
b. State on the financing statement that a copy of the
assignment agreement is available on request to the assignee.
5. A financing statement filed under subsection 2 may do any
of the following:
a. Designate the assignor as "debtor" and the assignee as
"secured party".
Senate File 2497, p. 8
b. Use the terms "assignor" and "assignee" or words of
similar import.
6. The filing of a financing statement under subsection 2 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 2.
7. 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.
8. An assignee shall comply with other law governing the
transfer of title to an asset.
9. By signing an assignment agreement, the assignor
authorizes the assignee to take the actions required by this
section.
Sec. 7. NEW SECTION . 681A.7 Notification to creditors.
1. 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.
2. The notification must satisfy all of the following
requirements :
a. Be in a record signed by the assignee.
b. Include the assignee's name, address, and other contact
information reasonably necessary to communicate with the
assignee.
c. Provide reasonable instructions for submitting a proof
of claim using the method established by the assignee under
section 681A.9, subsection 2, paragraph "e".
d. Identify the date established under section 681A.9,
subsection 2, paragraph 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.
3. An assignee shall use reasonable means to provide the
information in subsection 2 to unknown creditors, including
by any means the assignor regularly used to do any of the
following:
Senate File 2497, p. 9
a. Provide information to the assignor's creditors.
b. Communicate information about the assignor, other than
advertising, to the public.
Sec. 8. NEW SECTION . 681A.8 Duties of assignor.
1. Subject to section 681A.23, 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.
2. In furtherance of the duty under subsection 1, the
assignor shall do all of the following:
a. Preserve and turn over to the assignee the assigned
assets in the assignor's possession or control.
b. Provide to the assignee information reasonably necessary
to administer the assignment, the assigned assets, and the
assignment estate.
c. Sign any record reasonably necessary to transfer an
assigned asset and comply with any notarization required under
other law.
d. 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.
e. 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 681A.6.
f . On or as soon as practicable after the effective date of
the assignment agreement, provide the assignee with all of the
following :
(1) A list of all assets.
(2) A list of all the assignor's employees, including
those whose employment is terminated in connection with the
assignment .
(3) 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 .
g. A verification under penalty of perjury the accuracy of
Senate File 2497, p. 10
the lists required under paragraph "T".
h. 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.
i. Provide assistance to the assignee as required by the
assignment agreement.
3. The duties in this section also apply to a representative
designated under subsection 2, paragraph ^d" .
Sec. 9. NEW SECTION . 681A.9 Duties of assignee.
1. Subject to section 681A.23, an assignee has a fiduciary
duty to the assignment estate for the benefit of creditors to
do all of the following:
a. Provide a duty of loyalty, including the duty to manage
the assignment in good faith.
b. Use reasonable care to maximize distributions under
section 681A.15.
c. Wind up the assignment under section 681A.19 in a manner
compatible with the best interests of the assignment estate and
creditors .
2. Without limitation on the duties under subsection 1, and
subject to section 681A.23, the assignee also has a duty to do
all of the following:
a. Maintain a separate deposit account for funds related to
the assignment.
b. Collect on or dispose of each assigned asset, unless
the assignee determines it is more economically efficient to
abandon the asset.
c. Prepare and retain appropriate business records,
including a record of each receipt, disbursement, and
collection on or disposition of an assigned asset.
d. Pay administrative expenses of the assignment estate, to
the extent the assignment estate has sufficient unencumbered
assets .
e. Establish a method that is reasonably designed to permit
a creditor to submit a proof of claim.
f. 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
Senate File 2497, p. 11
hundred twenty days after the effective date of the assignment
agreement .
g. 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 681A.8,
subsection 2, paragraph ^d" .
h. At least every six months, provide to each creditor
a summary of the assets, liabilities, and expenses of the
assignment estate.
i. Comply with all requirements of the United States
internal revenue service and state and local taxing
authorities .
j, 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.
k. Send a final accounting under section 681A.19, subsection
1.
1. Comply with the other requirements imposed on the
assignee under this chapter.
Sec. 10. NEW SECTION . 681A.10 Powers of assignee.
1. An assignee has the powers necessary or appropriate to
perform the assignee's duties.
2. Unless the assignment agreement expressly provides
otherwise, the assignee has power to do any of the following:
a. 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.
b. Incur secured or unsecured debt and pay expenses
incidental to the exercise of the power under subsection 1.
c. Assert a right, claim, cause of action, or defense the
assignor could have asserted that relates to the assignment
estate.
d. 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
Senate File 2497, p. 12
from the assignment estate.
e. 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.
f. 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.
g. Settle a matter involving a debtor of the assignor.
b. 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.
i. Recover an asset in the manner and with the same effect
as the assignor could have done if the assignment had not been
made .
j. Settle claims against the assignment estate.
k. Abandon an assigned asset.
1. Subject to subsections 3 and 5, 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.
m. Invest funds, subject to applicable prudent investor
standards under other law.
3. The power under subsection 2, paragraph "1", 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.
4. For the purpose of exercising the assignee's power under
subsection 2, paragraph "2 ", 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 all of the following:
a. A lien creditor under section 554.9102, subsection 1,
paragraph "be", subparagraph (2), as to an asset that is a legal
or equitable interest in personal property or fixtures.
b. A bona fide purchaser as to an asset that is a legal
or equitable interest in real property, other than fixtures,
Senate File 2497, p. 13
located in this state.
c. 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.
5. An assignee's power under subsection 2, paragraph
"2 ", 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 federal bankruptcy code, 11 U.S.C.
§101 et seq., as amended.
6. An assignee shall exercise the powers under this section
consistent with the assignee's fiduciary duty under section
681A.9, subsection 1.
Sec. 11. NEW SECTION . 681A.11 Allowed claim.
1. An assignee shall allow a creditor's claim if all of the
following apply:
a. The creditor submits a proof of claim in compliance with
section 681A.13.
b. The assignee does not dispute the claim under section
681A.12 before final distribution.
2. An assignee may do any of the following:
a. 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 681A.9, subsection 2,
paragraph "f", even if the creditor does not submit a proof of
claim.
b. 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.
3. Any unsecured portion of an allowed claim shall be valued
as of the effective date of the assignment agreement.
4. A creditor's claim is allowed if the creditor succeeds in
a dispute under section 681A.12, subsection 2.
5. Subject to subsection 6, 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 681A.13. For each creditor's claim,
Senate File 2497, p. 14
the list must state all of the following:
a. The amount of the claim, if the amount is known to the
assignee.
b» Whether the claim is secured or unsecured and, if
secured, describe the collateral for the claim.
6. 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 5.
7. If requested by a creditor or other party with an
interest in the assignment estate, the assignee shall provide
the list created under subsection 5 to the person making the
request to the extent permitted by privacy laws and subject
to any privacy safeguards the assignee determines in the
assignee's business judgment are reasonably necessary.
Sec. 12. NEW SECTION . 681A.12 Disputed and disallowed
claims.
1. 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.
2. If a dispute cannot be resolved consensually, the
assignee may commence a proceeding under section 681A.21 to
disallow the claim. The assignee must commence the proceeding
before final distribution under section 681A.15. If the
proceeding is not filed before final distribution, the assignee
shall allow the claim under section 681A.11.
3. An assignee shall create a dollar-for-dollar reserve
for the estimated amount of the potential distribution on a
disputed claim.
4. Subject to subsection 2, 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:
a. The claim against the assignment estate is disallowed.
b. The claim for reimbursement or contribution is contingent
as of the time of allowance or disallowance.
c. The person asserts a right of subrogation to the rights
of a creditor.
Senate File 2497, p. 15
5. 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 2, as if the claim had become
fixed before the effective date of the assignment agreement.
6. An assignee may reconsider the assignee's decision
to allow or disallow a claim for cause. If a reconsidered
claim is allowed under section 681A.11, before the assignee
makes additional payments or transfers to other creditors that
are equal or junior in priority under section 681A.15 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 2 and 3.
Sec. 13. NEW SECTION . 681A.13 Proof of claim.
1. A proof of claim must do all of the following:
a. State the name, address, and other contact information
reasonably necessary to communicate with the creditor.
b. State the amount of the claim.
c. Briefly state the nature of the claim.
d. Identify any asset of the assignment estate securing the
claim.
e. Be signed by the creditor under penalty of perjury.
f. Include a copy of a record, if any, on which the claim is
based .
g. Be submitted using the method established under section
681A.9, subsection 2, paragraph "e".
b. Be submitted by the date established by the assignee
under section 681A.9, subsection 2, paragraph "f".
2. A proof of claim submitted in compliance with this
section is prima facie evidence of the validity and amount of
the claim.
3. The submission by a creditor of a proof of claim in
compliance with this section constitutes all of the following:
Senate File 2497, p. 16
a. The creditor's consent to the jurisdiction of the court
under section 681A.21.
b. Assignment to the assignee of any right of the creditor
to bring a voidable transaction action relating to the
creditor's claim.
Sec. 14. NEW SECTION . 681A.14 Rights of transferees.
1. An assignee's disposition of an asset does all of the
following:
a. Transfers to a transferee for value all of the assignee's
rights in the asset.
b. 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.
c. Discharges any subordinate security interest or other
lien subordinate to the assignee's lien.
2. A transferee that acts in good faith takes free of the
rights and interests described in subsection 1, even if the
assignee fails to comply with this chapter or the requirements
of a judicial proceeding.
3. If a transferee does not take free of the rights and
interests described in subsection 1, the transferee takes the
asset subject to all of the following:
a. The assignee's rights in the assets of the assignment
estate.
b. The assignee's lien and, if applicable, security
interest .
c. Any other security interest or other lien.
4. Unless otherwise provided in a record, any warranty
arising by operation of other law is disclaimed to the extent
permitted by other law.
5. 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
certif icate-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
Senate File 2497, p. 17
of the assignor whose asset is subject to the security interest
or other lien.
Sec. 15. NEW SECTION . 681A.15 Distributions.
1. In this section, ^protected secured creditor" means a
secured creditor, if all of the following apply to the secured
creditor's lien:
a, It is a perfected lien.
b. It cannot be avoided by the assignee under section
681A.10, subsection 2, paragraph "7
c. It is not subordinate to the assignee's lien.
2. Except as provided in section 681A.16, the assignee shall
pay claims from the assignment estate allowed under section
681A.11 in the order of priority stated in this section.
3. Unless otherwise agreed between the assignee and
a protected secured creditor, before distributions under
subsections 4, 5, 6, and 7, 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 7, paragraph ^b", 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.
4. After the distributions under subsection 3, the assignee
shall pay the necessary costs of the administration of the
assignment estate. The costs include all of the following:
a. Fees and reimbursements of the expenses of the assignee
and any professionals engaged by the assignee.
Senate File 2497, p. 18
b. Post-assignment taxes incurred by the assignee.
c. 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.
d. Post-assignment lease payments incurred by the assignee
in renting personal property used in the business of the
assignor .
e. Amounts required to be paid under the assignment
agreement for expenses of winding up the assignment under
section 681A.19.
5. After the distributions under subsections 3 and 4, the
assignee shall pay claims entitled to priority under federal
law including under 31 U.S.C. §3713, as amended, from the
assignment estate.
6. After the distributions under subsections 3, 4, and
5, 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 the
following :
a. The amount of the claim allowed as a priority claim
ahead of claims of other unsecured creditors under the federal
bankruptcy code, 11 U.S.C. §101 et seq., as amended.
b. The amount allowed as a priority claim ahead of claims of
other unsecured creditors under applicable nonbankruptcy law.
7. After the distributions under subsections 3, 4, 5, and 6,
each creditor shall receive a distribution of the assets of the
assignment estate in the following order of priority:
a. Unsecured claims entitled to priority ahead of claims of
other unsecured creditors under other law.
b. Unsecured claims not entitled to priority.
8. If the assets available for distribution to claims with
equal priority under subsection 7 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.
Senate File 2497, p. 19
9. If the claims entitled to the distribution under
subsections 3, 4, 5, 6, and 7 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 681A.11, subsection 2,
paragraph "d", and, after the allowed claims evidenced by a
late-filed proof of claim have been paid in full, as provided
in the assignment agreement.
10. An assignee may make interim distributions after
considering future expenses and the reserves for disputed
claims established under section 681A.12, subsection 3.
Sec. 16. NEW SECTION . 681A.16 Claim subordination.
1. A subordination agreement is enforceable under this
chapter to the same extent the agreement is enforceable under
other law.
2. Subject to subsection 3, all of 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 :
a. A claim arising from rescission of a purchase or sale of
the security or other equity interest.
b. A claim for damages arising from the purchase or sale of
the security or other equity interest.
c. A claim for reimbursement or contribution allowed on
account of the rescission or damage claim.
3. If the security is common stock or another common equity
interest, a claim subject to subordination under subsection 2
has the same priority as common stock or another common equity
interest.
Sec. 17. NEW SECTION . 681A.17 Liability.
1. An assignor is not personally liable for an act or
omission by the assignee.
2. An assignee is not personally liable for an act or
omission by the assignor.
3. A representative designated by an assignor under section
681A.8, subsection 2, paragraph ^d" , 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
Senate File 2497, p. 20
resulting from the representative's gross negligence or willful
misconduct .
4. 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.
5. Subject to subsection 6, an assignee is personally liable
for breach of a fiduciary duty under section 681A.9, subsection
1. If the assignee is liable all of the following apply:
a. 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.
b, The assignee is personally liable to the assignment
estate for a harm shared by all creditors or a class of
creditors.
6. 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:
a. A record of the assignor.
b. 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.
c. 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.
Sec. 18. NEW SECTION . 681A.18 Assignee removal — successor
assignee.
1. The assignor or a creditor may request the district
court to remove the assignee, if the assignor or creditor has a
reasonable belief grounds for removal exist under subsection 2.
2. After a request under subsection 1 or on the district
court's initiative in an action pending before the court under
section 681A.21, the court may remove an assignee based on any
Senate File 2497, p. 21
of the following:
a. For cause, including the assignee's fraud, dishonesty,
incompetence, gross mismanagement, or failure to comply with
this chapter.
b. If removal of the assignee best serves the interests of
the creditors.
3. 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
681A.4, subsection 1, or is subject to removal under subsection
2. A court shall appoint a successor assignee if any of the
following apply:
a. The assignment agreement does not provide for a successor
assignee.
b. The successor assignee provided for in the assignment
agreement is ineligible to be an assignee under section 681A.4,
subsection 1, or is subject to removal under subsection 2.
4. Subject to section 681A.17, an assignee that 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 does
all of the following:
a. Accounts for and turns over to the successor assignee all
assets of the assignment estate.
b. Submits to creditors a report summarizing the receipts
and disbursements made during the service of the assignee.
5. 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.
Sec. 19. NEW SECTION . 681A.19 Winding up.
1. On completion of an assignee's duties, the assignee shall
send a creditor whose claim is allowed under section 681A.11,
and not satisfied in full, a final accounting sufficient to
inform the creditor of all material aspects of the assignment,
including all of the following:
a, A description of the actions taken by the assignee under
Senate File 2497, p. 22
the assignment.
b. 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.
c. 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 .
d. A summary of collections and dispositions of assets by
the assignee.
e. A summary of distributions made or proposed to be made by
the assignee for creditor claims.
f. A description of additional work to be done by the
assignee to complete the administration of the assignment
estate and the distributions under section 681A.15.
g. Other information considered reasonably necessary by the
assignee .
2. 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 .
3. If the final accounting describes additional work under
subsection 1, paragraph "f", the assignee shall exercise the
powers appropriate to complete the work.
4. Upon completion of the assignee's duties, the assignor is
entitled to obtain or effect the termination of any financing
statement filed by the assignee under section 681A.6 to the
same extent that a debtor would be entitled to obtain or
effect the filing of a termination statement under section
554.9509, subsection 4, paragraph "b", or section 554.9513 upon
satisfaction of the secured obligations.
Sec. 20. NEW SECTION . 681A.20 Interstate matters.
1. Subject to subsection 2, 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
Senate File 2497, p. 23
this chapter.
2. 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 681A.15,
subsection 6, paragraph "d", the assignee shall use the amount
asserted or determined under the law of the other state.
3. 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.
Sec. 21. NEW SECTION . 681A.21 Court action.
1. A district court 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.
2. 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 1, 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.
3. Acceptance of the assignment by the assignee constitutes
the assignee's consent to the jurisdiction of the court.
Sec. 22. NEW SECTION . 681A.22 Ancillary assignee.
1. Subject to other law of this state governing a person
from another state serving as a fiduciary in this state, the
district court 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 all of the following apply:
a. The person or nominee would be eligible to serve as an
assignee under section 681A.4.
b. The appointment furthers the person's possession,
custody, control, or disposition of an assigned asset under the
assignment in the other state.
2. The court may issue an order that implements an order
entered in another state appointing or directing an assignee or
Senate File 2497, p. 24
otherwise concerning an assignment in the other state.
3. Unless the court orders otherwise, an ancillary assignee
appointed under subsection 1 has the rights, powers, and duties
of an assignee appointed under this chapter.
4. 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, on notification in a record by an ancillary assignee
appointed under subsection 1, turn over the asset to the
ancillary assignee.
Sec. 23. NEW SECTION . 681A.23 Provisions variable by
agreement.
1. Except as provided in this section and section 681A.10,
subsection 2, the provisions of this chapter shall not be
varied by agreement.
2. The duties under section 681A.8, subsection 1, and
section 681A.9, subsection 1, shall 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 681A.8 and the assignee
under section 681A.9 if the standards are not manifestly
unreasonable.
3. Except as provided in section 681A.17, subsection 4, the
assignment agreement may limit the assignee's liability under
section 681A.17 and may require the assignee be indemnified by
the assignment estate.
4. Except as provided under section 681A.7, subsection 1,
whenever this chapter requires an action to be taken within
a reasonable time, a time not manifestly unreasonable may be
fixed by agreement.
5. The assignment agreement may provide for duties of the
assignee in addition to those in this chapter.
Sec. 24. NEW SECTION . 681A.24 Uniformity of application
and construction.
In applying and construing this uniform act, a court shall
consider the promotion of uniformity of the law among states
that enact it.
Sec. 25. NEW SECTION . 681A.25 Relation to Electronic
Signatures in Global and National Commerce Act.
Senate File 2497, p. 25
This chapter modifies, limits, or supersedes the Electronic
Signatures in Global and National Commerce Act, 15 U.S.C. §7001
et seq., as amended, but does not modify, limit, or supersede
15 U.S.C. §7001(c), or authorize electronic delivery of any of
the notices described in 15 U.S.C. §7003(b).
Sec. 26. NEW SECTION . 681A.26 Transitional provision.
This chapter applies to an assignment made on or after the
effective date of this Act.
Sec. 27. REPEAL. Chapter 681, Code 2026, is repealed.
DIVISION II
COORDINATING PROVISIONS
PART A
FRANCHISES
Sec. 28. Section 523H.7, subsection 3, paragraph b, Code
2026, is amended to read as follows:
b. All or a substantial part of the assets of the franchise
or the business to which the franchisee relates are assigned to
or for the benefit of any creditor which is subject to chapter
•6Hi 681A . An assignment for the benefit of any creditor
pursuant to this paragraph does not include the granting of a
security interest in the normal course of business.
Sec. 29. Section 537A.10, subsection 7, paragraph c,
subparagraph (2), Code 2026, is amended to read as follows:
(2) All or a substantial part of the assets of the franchise
or the business to which the franchisee relates are assigned to
or for the benefit of any creditor which is subject to chapter
681A . An assignment for the benefit of any creditor
pursuant to this subparagraph does not include the granting of
a security interest in the normal course of business.
PART B
JUDICIAL ADMINISTRATION
Sec. 30. Section 602.8102, subsection 122, Code 2026, is
amended to read as follows:
122. Carry out duties relating to the assignment of property
for the benefit of creditors as provided in chapter -fr&i 681A .
PART C
TRANSFER TAX
Sec. 31. Section 428A.2, Code 2026, is amended by adding the
following new subsection:
Senate File 2497, p. 26
NEW SUBSECTION . 23. The transfer of property from an
assignor to an assignee pursuant to an assignment agreement
under chapter 681A.
DIVISION III
EFFECTIVE DATE
Sec. 32. EFFECTIVE DATE. This Act takes effect January 1,
AMY SINCLAIR PAT GRASS
President of the Senate Speaker of the House
I hereby certify that this bill originated in the Senate and
is known as Senate File 2497, Ninety-first General Assembly.
iddAÂkûû W. CHARLES SMITHSON
Govern^