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Bill

SB 15

Uniform Assignment for Benefit of Creditors Act; creates a voluntary state law process for distressed organizations to liquidate assets and distribute proceeds to creditors

2026 Regular Session Introduced by Sam Givhan

SB 15 creates an optional state liquidation process for struggling organizations to settle debts with creditors outside federal bankruptcy court.

Enacted
#businesses&financialinstitutions
0
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Bill Summary · SB 15

Legislative bill overview

SB 15 establishes a voluntary state law framework allowing financially distressed organizations to liquidate assets and distribute proceeds to creditors outside of formal bankruptcy proceedings. The bill adopts a uniform assignment process, likely modeled on the Uniform Law Commission's model act, to provide a streamlined alternative to federal bankruptcy court.

Why is this important

This creates an alternative debt resolution path that could be faster and less expensive for small businesses, nonprofits, and other organizations compared to federal bankruptcy. However, it also potentially shifts creditor protections and may disadvantage smaller creditors who lack negotiating power in voluntary arrangements versus court-supervised bankruptcy.

Potential points of contention

  • Creditor consent requirements – Whether all creditors must agree or if majority approval suffices, affecting holdout creditors and payment priority disputes
  • Debtor protection limits – Voluntary assignment processes typically offer fewer safeguards than bankruptcy law, raising concerns about fraud or preferential treatment of connected creditors
  • Impact on wage earners and employees – Unclear whether employee wage claims and benefits receive the same priority protection as in federal bankruptcy

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

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