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SB 267

AN ACT TO AMEND TITLE 10 AND TITLE 30 OF THE DELAWARE CODE RELATING TO THE UNIFORM ASSIGNMENT FOR BENEFIT OF CREDITORS ACT.

153rd General Assembly (2025-2026) Introduced by Darius Brown and 2 co-sponsors

Delaware adopts UABCA to enable asset assignments for creditor benefit under an assignee, streamlining liquidation, distributions, and creditor protections outside bankruptcy.

Signed by Governor
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WeVote Research Nonpartisan
Bill Summary · SB 267

Summary: SB 267 (Session 153, Delaware) – Uniform Allocation for Benefit of Creditors Act (UABCA)

Purpose and Intent

SB 267 proposes amendments to Title 10 and Title 30 of the Delaware Code to align Delaware law with the Uniform Allocation for Benefit of Creditors Act (UABCA). The act governs the orderly and efficient administration of insolvent estates by allowing a debtor or creditor to transfer assets to a fiduciary who then liquidates those assets for the benefit of creditors. The bill aims to provide a clear, streamlined framework for the assignment and administration of the debtor’s assets for the benefit of creditors, reducing delays and increasing predictability in insolvency proceedings.

Key Provisions and Changes (Substantive Provisions)

  • Adoption of UABCA Framework: Incorporates the Uniform Allocation for Benefit of Creditors Act into Delaware law, including procedures for the execution and supervision of an assignment for the benefit of creditors (ABC).

  • Creation and Role of an Assignee: Establishes the role and duties of an assignee who takes title to the debtor’s assets and administers them for the benefit of creditors. The assignee has fiduciary duties, including good faith, loyalty to creditors, and prudent management.

  • Assignment Process:

    • Establishes the criteria for initiating an assignment for the benefit of creditors.
    • Outlines the requirements for the assignment agreement, including notice, documentation, and acceptance by the assignee.
    • Sets standards for the valuation and collection of assets, and for liquidating assets in a manner that maximizes recoveries for creditors.

  • Creditor Protections and Priority:

    • Defines the priority of claims in the ABC process and protections for creditors’ interests.
    • Provides mechanisms to address disputes or challenges to the assignment, including potential court oversight or review in certain circumstances.

  • Powers and Duties of the Assignee:

    • Authority to collect, manage, sell, and distribute assets.
    • Responsibility to maintain proper records, provide reports to creditors, and ensure transparency in distributions.

  • Distributions to Creditors:

    • Sets out the method and timing for distributions to creditors following asset liquidation.
    • Provides for distribution of proceeds after satisfying allowed claims, costs of administration, and potential fees.

  • Limitations and Termination:

    • Conditions under which the assignment may be terminated, and the process for concluding the administration (including final reports and closing of the case).

  • Transition Provisions:

    • May include guidance for how existing insolvency matters are to be treated under the new UABCA framework (e.g., ongoing cases or pending assignments).

Note: The summary reflects typical elements of UABCA-style reforms. The bill text would specify exact statutory language, applicable timelines, filing requirements, and procedural steps. If enacted, Delaware would align its practice with other states that utilize ABC frameworks to facilitate efficient creditor recoveries outside formal bankruptcy proceedings.

Who Would Be Affected

  • Debtors/Assignors: Persons or entities transferring assets under an ABC arrangement.
  • Assignees: Fiduciaries appointed to manage and liquidate assets for creditor benefit.
  • Creditors: Beneficiaries of the assets through the assignment process, with defined rights and protections.
  • Judicial/Administrative Entities: Courts or statutory authorities that may oversee or review assignments in certain situations.
  • Businesses and Financial Institutions: Entities involved in or contemplating insolvency proceedings or asset assignments.

Procedural and Timeline Aspects

  • Legislative History:
    • Introduced and assigned to the Senate Judiciary Committee (March 25, 2026).
    • Reported out of Committee with a favorable vote (1 vote in favor; 4 on the merits) on April 15, 2026.
  • Implementation:
    • If enacted, the act would become part of Title 10 and Title 30 of the Delaware Code, superseding or supplementing existing provisions related to assignments for the benefit of creditors.
    • Potential regulatory effective date would be specified in the bill, with any transitional provisions to address ongoing matters.

Practical Impact

  • Offers a clearer, standardized mechanism for asset assignments intended to maximize creditor recoveries without formal bankruptcy.
  • Potentially reduces time and costs associated with asset liquidation and distribution.
  • Enhances creditor protections through defined rights, duties, and oversight mechanisms.
  • Could influence how distressed companies structure workouts or out-of-court settlements.

If you’d like, I can tailor this summary to emphasize particular stakeholders (e.g., creditors vs. debtors) or compare it to existing Delaware processes or UABCA provisions in other states.

Compiled from official sources — confirm details with the bill’s official record.

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