The Uniform ABC Act: A Practical Alternative to Bankruptcy

Robert Saunders of our firm, as an Advisor to the Uniform Law Commission’s drafting committee for the Uniform Assignment for the Benefit of Creditors Act (UABCA), participated in drafting the Act, and is currently on the California Lawyers Association’s Ad Hoc Subcommittee on California Enactment of the UABCA. He recently penned an article on the UABCA that provides guidance on why and when the Act is beneficial to participants in the ABC process. An assignment for the benefit of creditors (ABC) is a voluntary state-law process in which a distressed company transfers substantially all of its assets to an independent fiduciary (called an assignee) to preserve, market, sell, and distribute value to creditors. The UABCA is designed to make ABCs more predictable, more portable across states, and more useful for modern distressed transactions than many legacy ABC statutes or common-law regimes and makes ABCs available in enacted states that currently have no ABC laws or have laws too impractical to use. The UABCA functions as a transaction platform, addressing eligibility, enterprise groups, assignee powers, buyer protections, secured-creditor protections, claims administration, optional court access, interstate recognition, ancillary assignees, and assignment-agreement customization.

The UABCA became available to the states on October 20, 2025, and has been enacted by six states as of June 11, 2026 (Alabama, Arizona, Delaware, Iowa, Nebraska and Utah). Enactment in Delaware makes the UABCA a national alternative for many troubled companies.

Key questions the paper addresses:

• What is an ABC, and why should mainstream restructuring professionals care?
• Why does the UABCA matter now?
• Why is the UABCA attractive to assignees?
• Why is the UABCA attractive to assignors and sponsors?
• Why should buyers want their purchase to be under the UABCA?
• Why should lenders and other creditors view the UABCA favorably?
• What does the UABCA do for going-concern value?

To read the full paper, click below.

The article is also available on the Uniform Law Commission’s website.