An ABI Committee Newsletter
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| Vol 20, Num 3 | July, 2026
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by Robert M. Saunders
Pachulski Stang Ziehl & Jones; Los Angeles
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Assignments for the benefit of creditors (ABCs) have long been a practical alternative when chapter 11 is too expensive, too slow, too public or too destructive to going-concern value. In an ABC, a distressed company assigns substantially all of its assets to an independent fiduciary, called an assignee, that preserves, markets, sells or otherwise realizes value from the assets, and distributes proceeds to creditors.
For financial advisors and investment bankers, the practical question is not whether an ABC looks like bankruptcy. It does not. There is no automatic stay, no debtor in possession, and no comprehensive bankruptcy court overlay. The practical question is whether the process can support a credible sale or winddown, protect value, produce usable diligence, and give buyers, lenders and boards enough confidence to proceed. The Uniform Assignment for Benefit
of Creditors Act (UABCA), approved by the Uniform Law Commission in 2025, was drafted to answer those deal-professional questions.
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