H.B. 382 Uniform Assignment for Benefit of Creditors Amendments

What this bill does

This bill replaces Utah's older 1950s assignment for the benefit of creditors statute with a Uniform Law Commission version. It sets out a state-law process that lets a business that cannot pay its creditors transfer its assets to a designated person to pay those creditors, as an alternative to federal bankruptcy.

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Every vote

• 8 yes, 1 no, 1 absentHouse Economic Development and Workforce Services Committee: vote to approve it · Feb 9, 2026Who voted how
• 69 yes, 1 no, 5 absentFinal House vote · Feb 18, 2026Who voted how
• 6 yes, 0 no, 2 absentSenate Business and Labor Committee: vote to approve it · Feb 24, 2026Who voted how
• 26 yes, 0 no, 3 absentFirst of two Senate votes · Feb 26, 2026Who voted how
• 27 yes, 0 no, 2 absentFinal Senate vote · Feb 27, 2026

Hearings and debates

• Feb 9, 2026 House Economic Development and Workforce Services Committee▶ Watch
  Transcript (23 turns)

  1. Chair Hawkins (presiding)2:14:50

     Okay. Um, we'll go on to the third item on our agenda. Uh, HB three 18 or 3 82, excuse me. Um, Representative Teuscher, you can sit right there. Um, uniform assignment for benefit of creditors amendments.

  2. Rep. Jordan D. Teuscher2:15:06

     Yeah. Thank You. Uh, thank you, Mr. Chair. Um, I wonder if there is someone online, uh, ed Edwin Smith. Do do we have Edwin? You can join me in this presentation. He's getting promoted. Okay. Yeah. Great. So as, as he comes on, um, he can introduce himself, but, uh, has been involved in the, the drafting of this legislation as an expert in this space, and can answer any of the specific questions, uh, the committee has. But let me, let me just introduce, um, this, uh, this bill. Um, many of you may not be familiar with the term assignments for the benefit of creditors. Um, but, but these laws are state laws that are governed alternatives to federal bankruptcy release relief. So essentially, uh, it's a way through the state law and, and originally, um, uh, constructed in the common law for those, uh, businesses that, uh, can't pay their creditors to have an option, um, to go through, uh, a process of, uh, getting rid of all of their assets and paying those out to, to their creditors. Um, now this bill that you see before you comes as part of the, um, the really stringent uniform, uh, law Commission process. And let me just tell you a little bit about that. Each state has a number of commissioners, uh, that they have that are appointed to the Uniform Law Commission. This is a commission that was started over a hundred years ago to try to bring the states together in certain areas where it makes sense to have, uh, consistent laws that govern, uh, across the, the different states, but not in an area that would be governed by federal law. Uh, in federal law. Those, those numerated, um, areas of law that the, the federal government is entitled to create law around we want to respect, but in the, in the other areas, we want to continue to respect the, the bounds of federalism. Um, but it still makes sense to have consistent laws that people, as they move from state to state, uh, are treated the same way or can expect the same types of, of treatment and law. And that's what what you see with the Uniform Law Commission. And so, myself, along with Senator McKell, uh, represent the legislature in the Uniform Law Commission. Uh, and then we have an appointee. Um, we have a couple appointees from the, from the Governor and one, a member of our Office of Legislative Research and General Counsel. Um, our, our, uh, Utah Commission, uh, then goes annually and meets with the National Commission to study, uh, important laws. And, and when they go about this lawmaking process, uh, they first, uh, take ideas that, that go into a committee that kind of vets them out. And if they believe that this is something that's valuable, we're studying to have a uniform law. Uh, then they'll put together a study committee. That study committee will study it, uh, typically for two years before they come back with a recommendation that gets voted on by the entire body to open up a drafting committee. And then the drafting committee is made up of these commissioners across the country, along with experts in the field, uh, usually a, a law professor that sits as a recorder. It's an expert in this space, uh, members of industry, those that practice in this area to come back and, and draft the law in a way that is consistent, uh, that's nonpartisan and, um, that will provide the best benefit across all the states. So this, this bill that you see here, house Bill 3 82 has followed that process, um, was, was passed out by the Uniform Law Commission this last year, provides a clear path, uh, for those businesses that, uh, want to take advantage of the assignment for the benefit of creditors, and, um, makes that very clear. So, uh, with that, Mr. Chair, if I could turn some time over to Edwin to, uh, add a little more color to, to the bill and the process, and then, um, you know, he, he could also be around to answer any questions the committee might have. Great. Thank you. Edwin, do you, do you have the ability to, to turn your camera on?

  3. Edwin Smith, Morgan Lewis and Bockius LLP2:19:16

     I'm, I, my apologies, Mr. Chair. I'm having trouble getting my camera on.

  4. Chair Hawkins (presiding)2:19:21

     Okay. No, no problem. I just wanted to see if that was a possibility. So, go ahead.

  5. Edwin Smith, Morgan Lewis and Bockius LLP2:19:27

     Well, it's not just because I'm having a bad hair day. Understood. But, uh, uh, but thank you very much for entertaining this Uniform Act. Uh, part of the problem is that for a lot of small businesses, bankruptcy has become too expensive, uh, and there are not a lot of other alternatives out there. Uh, and an assignment for the benefit of creditors gives a troubled business the ability to liquidate its assets, uh, in a efficient, uh, and less costly and flexible manner, uh, than under current law. Uh, Utah does have an assignment for benefit of creditors statute, uh, but I don't know how often it's used. Uh, it requires a lot of court supervision. It rigidly controls the, uh, compensation that an as IEE is entitled to. Uh, and it has other provisions like posting a bond, uh, that make the process really more expensive and cumbersome than would be ideal. Uh, what we have done with this Uniform Act is try to take the best provisions that we can find from, uh, states all across the country in order to come up with a uniform act. Uh, the advantage of a uniform act is that, uh, one can have some certainty as to the types of procedures that could be used in each state. Uh, we also have provisions where if an sign or has assets located in a state different than the state in which the assignment is taking place, uh, that the assignment can be recognized in that other state. Uh, we don't require court supervision at the outset, but anyone who feels, uh, injured or wrong by the process is entitled to go to court and get a hearing. Uh, and we also have provisions that protect someone who buys from an as assignee. Uh, we delineate the duties that the, as assignee has, in particular, the as assignee is a fiduciary duty, and we define what those fiduciary duties are. We have a claim resolution process where there is, if there is disagreement, uh, the assignee can go to court and try to resolve that disagreement. Uh, and so we think that what we've created here is a process that is more efficient, more flexible, and less costly under current law. Now, it won't be ideal for every distress business. Uh, some businesses just need to go through bankruptcy because of the enhanced powers under the bankruptcy code. Uh, but for others it could be a useful tool. And we wanted the assignment for the benefit of creditors to be as useful as possible so that a distressed business can make a value proposition as to whether it would like to do an assignment for the benefit of creditors or receivership, uh, or a bankruptcy, or just dissolve under state law. We just wanted to make sure that the assignment for benefit of creditors was as useful as it possibly could so that a distressed business could make that value choice. Thank you, Mr. Chair.

  6. Chair Hawkins (presiding)2:23:29

     Thank you, Mr. Smith. Um, representative Zach. It does. Thank you. Yeah, you Bet. So we'll bring it back to the, the, uh, committee for Questions, Representative Owens.

  7. Rep. Doug Owens2:23:41

     Thank you, Mr. Chair. Thank you to the sponsor for doing this, Representative Teuscher and, um, the, uh, what other states have already adopted this. And then the second question is, have you modified what the recommendation of the, the, uh, commission was in any way? And, and could you speak to those modifications if so?

  8. Rep. Jordan D. Teuscher2:24:02

     Yeah, great. Great question. So, uh, as I mentioned, this is a bill that just passed the, um, uniform Law Commission this last year. So it has been, um, filed in, um, uh, six different states, Arizona, Colorado, uh, Nebraska, Oklahoma. And, um, I'm trying to figure out on the map Alabama As legis, as, as Bills, you mean, Or? Yes. And they, and they're advancing in various stages. We have the first legislative session in the country, so ours is likely to be able to make it to the end, uh, quickly enough. But my understanding is there are, you know, uh, a dozen or more states that are planning this year, uh, to move forward with this legislation. And then in terms of any modifications, everything that we've done, uh, to fit within the Utah statute is in accordance with the uniformity, uh, required under the Uniform Law. So they've looked at that to make sure that it is, it's checked off and is is uniform as to, uh, if there was anything in the bill where there was, uh, the, you know, kind of option a, option B that the, the Uniform Law Commission had, I, I can't remember on this bill for sure, if there was any of those options. I think there was something around timing, um, of like whether it was 30 days or 45 days, maybe Edwin can speak to that. No,

  9. Edwin Smith, Morgan Lewis and Bockius LLP2:25:21

     That, that, that's correct. It's, uh, there is timing on, uh, by when a proof of claim needs to be filed and when notice is given to creditors.

  10. Rep. Jordan D. Teuscher2:25:32speaker not certain

      So no, no substantive changes. No,

  11. Rep. Doug Owens2:25:35

      No. I want to thank you for doing this. I, I want to tell you that I got to be a lawyer and pass the bar without River ever really understanding the UCC and all that stuff. So I appreciate you taking care to get this correct in our code.

  12. Chair Hawkins (presiding)2:25:48

      Thank you. Thank you, Representative Owens. Representative Cutler,

  13. Rep. Paul A. Cutler2:25:53

      Just a quick question for you, or maybe Mr. Smith. Could, could, uh, or what is the main difference between the powers of a bankruptcy trustee to distribute the assets and the, the person here that's going to determine the, the assignment agreement. Is they function similar or, and what's the difference in the powers?

  14. Rep. Jordan D. Teuscher2:26:15speaker not certain

      I'll defer to, to Mr. Edwin.

  15. Edwin Smith, Morgan Lewis and Bockius LLP2:26:18

      Uh, the powers are very similar except, uh, a bankruptcy trustee has even greater powers, uh, a bankruptcy can assume and assign, uh, unperformed contracts, uh, which an ask sunny for the benefit of creditors cannot do. Uh, a bankruptcy trustee can recover preferences, uh, which, and as I need for the bin of creditors cannot do, unless preference is an insider preference Under the fraudulent transfer statute, uh, in chapter 11, you can reorganize, uh, but under, um, the, uh, an assignment for the better of creditors. It's a liquidation procedure. Uh, but otherwise the bankruptcy trustee and the S IEE are both fiduciaries and have to be disinterested and are held to very similar standards.

  16. Chair Hawkins (presiding)2:27:18

      Thank you very much. Thank you, representative Keller. Okay. I don't see any other lights. Is there anyone that would like to, we'll open it to public comment. Anyone like to speak about this? Okay. We'll close public comment and bring it back to the committee for, um, further action. No substitute on this, right? No. Okay.

  17. Chair Hawkins (presiding)2:27:46

      Representative Cutler,

  18. Rep. Paul A. Cutler2:27:48

      He's gonna let, uh, one of our lawyers do it, but I'll go ahead and favorably recommend HB 3 82 uniform assignment of be benefit of creditors amendments, uh, to the full house.

  19. Chair Hawkins (presiding)2:27:59

      So that motion is in order, uh, to recommend or favorably recommend HB 3 82. Would you like to speak to that motion? Yeah. Okay. Uh, further discussion to the motion. Seeing none will go to the sponsor.

  20. Rep. Jordan D. Teuscher2:28:12

      Well, thank you, Mr. Chair. I know this is the most interesting bill, which your committee will, will hear this year, but, um, though it is, it is very technical, let me just say that this is a tool that will be a good benefit for Utah companies. Uh, it will allow them, um, in, in the circumstance that this is the right fit for them to be able to get through these situations faster, less expensive, uh, to be less disruptive to workers and customers than in your regular bankruptcy process. And so I really, uh, appreciate, uh, the motion and urgent support.

  21. Chair Hawkins (presiding)2:28:48

      Perfect. Um, okay. We'll go back to the maker of the motion. Okay. Uh, submission is waived. Um, the motion is to favorably recommend HB 3 82. Place that motion. All in favor to say aye. Aye. Aye. Any opposed? Okay. So we have, um, eight in favor, and one, uh, what, eight? Uh, eight to one. Um, with Representative Hansen voting no. So, um, okay. Thank you, Representative Teuscher. Thank you.

  22. Chair Hawkins (presiding)2:29:24

      I'll take one final motion. Adjourn. Motion to adjourn. Representative Hansen. Uh, all in favor say aye. Aye. Any opposed? Okay, we are adjourned.

  23. Unknown speaker2:29:38speaker not certain

      Mr. Chair.

• Feb 18, 2026 House floor debate▶ Watch
  Transcript (3 turns)

  1. Speaker (presiding)1:36:34

     House Bill 3 82 uniform assignment for benefit of creditors amendments by Representative Teuscher. This bill was served in economic development and Workforce Services with the vote of 8 1 1 Representative Teuscher.

  2. Rep. Jordan D. Teuscher1:36:46

     Thank you Mr. Speaker. Um, as many of you know, assignment for the benefit of creditors is an alternative to the bankruptcy options that are offered under federal law, um, really for businesses that can't pay its creditors. Now, this, this, uh, this option, the assignment for the benefit of creditors has been around for, um, really since the beginning of our country existing in common law. Um, however, it is something that, uh, Utah codified back in 1953 and, and a number of other states have done that or have relied on the common law to move this, this, uh, process forward. However, um, it was something that was taken on by the Uniform Law Commission to say, could we come up with a uniform state law across the country that would provide for this, uh, valuable tool for those companies that find themselves in financial distress? And that's what you see here in House Bill 3 82, as many of you're aware of the Uniform Law Commission, uh, rigorous process of where they study an issue for a couple of years, um, and then put together a drafting committee that's made up of, uh, experts in the legal field on this area, moving and working with industry as well to find the best, best, uh, options forward and ensure that it has a bipartisan and, uh, consensus across the board in, in moving forward with that bill. The way the, um, assignment for the benefit of creditors option works is, uh, essentially if you have a business that can't pay its bills, then it hands over all of its assets, uh, to an assignee a a third party. Now that, that assignee has to be independent, they can't be a friend or an insider, and they Loa owe an a legal duty to all of the creditors, not just one. And if for whatever reason they're not doing their job right, then any debtor could then, um, ask for that assignee to be removed. They can also exercise whatever options they already have within the legal framework, um, uh, to be able to secure their debts, um, as, as they could in, in, you know, without the assignment for the benefit of creditors. But that assignee then goes out and they sell off the business' assets and then they use the money from the assets to pay the creditors in a fair order. Um, as I mentioned, this is a, a tool that is used that is a lot less expensive than going through, um, your federal options for bankruptcy and, uh, allow for just really cleaning up the language that Utah's already had in place, uh, since 1953. Mr. Speaker, with that, I'm happy to answer any questions.

  3. Speaker (presiding)1:39:23

     Thank you Representative Teuscher discussion to the bill. See none back to Representative Teuscher for summation, I'll waive summation has been waived. Voting will now be open on HB 3 82 yesterday. All present having voted voting is now closed. HB 3 82 passed this body. 69 yes votes one no vote will be sent to the Senate for its consideration. Uh, let's go to Madam Reading Clerk

• Feb 24, 2026 Senate Business and Labor Committee▶ Watch
  Transcript (9 turns)

  1. Committee chair1:00:14

     'cause the next item on the agenda is item number eight, HB 3 82 uniform assignment for benefit of, uh, creditors amendments.

  2. Committee chair1:00:22

     Uh, Representative Teuscher, please, please go ahead, tie out your time as yours.

  3. Rep. Jordan D. Teuscher1:00:26

     Great. Thank you Mr. Chair, and I appreciate the accommodation. Um, this is a, a relatively simple bill, um, currently in the code Utah has, um, We do have a handout. Did, did you want that passed Out? Yeah, do you mind? Yeah, that might give just a little bit of, um, background and context for members of the committee. So, as I was saying, currently in the code, um, Utah has a statute, uh, that outlines assignment for the benefit of creditors. This is in, um, chapter six of the code. And, um, this is a, um, uh, a method that has been around, uh, for a long time for how a, a company could wrap up and dissolve its assets, uh, in the event that, um, they're facing sort of a bankruptcy or they've decided to, to close up shop. Now, typically, most people are familiar with the Federal Bankruptcy Court, either Chapter seven, chapter nine, chapter 11, um, bankruptcy. This is an alternative method that's through state, uh, law and also is recognized in the, in common law. And, um, allows for a, uh, a non bankruptcy cleanup options for businesses that can't pay its creditors. And essentially, you, you assign a, um, an assignee that takes all of the business' assets, understands who the creditors are, and then they divvy that up, um, among the creditors. This process is a lot more streamlined than your typical, um, bankruptcy process, mostly because the court isn't really involved. Typically when you're looking at it, you have a chapter seven that would be similar to this, but in your other type of like a chapter nine, chapter 11, the court's trying to restructure things. There's a lot of claims, a across the different creditors. This is a much more streamlined, simple process. Well, the Uniform Law Commission took on, uh, the goal of trying to come up with a more unified approach across the states for this process. Um, because it is a, it could be a, a very important tool for everyone. And, and every state does it just a little bit differently. And if we had more uniformity, they, they believe that, uh, we might see, uh, more groups take advantage of this important tool. And so what HP 3 82 is, is just adopting the uniform law, um, in place of the current law that Utah put in place, um, back in the 1950s. And, uh, that is a bill. Happy to answer any questions about it.

  4. Committee chair1:02:44

     Thank you. Come back to the committee for any clarifying questions. Seeing none, is there anyone in the public like to testify on this? Anyone online? No one online. We'll come back to the committee for further deliberation of act action.

  5. Unknown speaker1:03:04speaker not certain

     Recent change That, pardon me? Did he raise his hand? Okay.

  6. Committee chair1:03:14

     Uh, anyone like to make a motion?

  7. Sen. Don L. Ipson1:03:19

     Okay, I'll make a motion. Senator Ipson. So I make a motion, the House bill 3 82 uniform assignments for benefit accreditors. Pass this committee with a favorable recommendation, the full floor of the Senate.

  8. Committee chair1:03:37

     Okay. Motion for us is to favor we recommend House Bill 3 82. Uh, any discussion of that motion? Saying none. Representative. I Appreciate the enthusiastic support of this bill. We're trying. Some of us are not awake. Senator Ipson. I'll take that as a wave. I'll place the motion. All in favor and say aye. Aye. Aye. Aye. Aye. Any opposed? Say nay. Say nay. We'll, let pass unanimously. Six to zero. Thank you.

  9. Committee chair1:04:07

     Thank you. Okay, let's go back up. Uh, I still don't see Representative Dunnigan. Next would be Representative Peterson is, oh, did he step out again? Okay, then, uh, Representative Ballard

• Feb 26, 2026 Senate floor debate▶ Watch
  Transcript (6 turns)

  1. Sen. Michael K. McKell38:34

     Bill comes from the Uniform Law Commission and this Uniform Law Commission assignment for benefit credit creditors went through rigorous drafting process within the Uniform Law Commission. Um, basically the A BC is, as it's known, is a non bankruptcy cleanup option for businesses that can't pay its creditors. The process works as follows. A, a business that can't pay its bills will voluntarily hand over its assets to a third party and assignee. Second part is the assignee will sell all of the business assets. And third part is the assignee uses money from selling the assets to pay for the creditors in fair order. This is an alternative to bankruptcy, but it's an alternative also is done through the Uniform Lock Commission. So we have some consistency from state to state. With that, I'm open for questions. Thank you. Senator Macal, say no questions to you for a motion. Thank you. I'm gonna waive summation to move this bill be read for the third time. Thank

  2. Sen. J. Stuart Adams (presiding)39:28

     You. The question is, shall house bill 3 82? If you read a third time Quel

  3. Sen. J. Stuart Adams (presiding)39:32

     Vote. Senator Spry. Senator Brammer Bus Colmore Escamilla Aye. Fillmore Grover Harper Kins Ipson Johnson. Juab McKay. Aye. Mikel Milner. Musselman Owens Pitcher Plum Rebe Sandal Stevenson Stratton Vickers. Weiler Aye. Wilson Winterton Bus President Adams Aye. House Bill 3 82. Having received 26 sha votes, zero na votes. Three being absent shall be read a third time.

  4. Sen. J. Stuart Adams (presiding)40:34

     Senator Fillmore,

  5. Sen. Lincoln Fillmore40:37

     Motion to encircle house Bill two 90 We have a motion to encircle house Bill two 90.

  6. Sen. J. Stuart Adams (presiding)40:43

     Child tax credit amendments. All in favor say aye. Aye. Any opposed? Roll that motion passes. The bill is Uncircled. Senator Fillmore.

• Feb 27, 2026 Senate floor debate▶ Watch
  Transcript (8 turns)

  1. Sen. Michael K. McKell52:37

     This is the, a Uniform Law Commission bill. Uniform assignment of benefits of Creditor amendments. This is the alternative. If a company wants to work out a process, this is the alternative. If they wanna have an alternative process to bankruptcy, this is the process used through the Uniform Law Commission. Uh, great, great Bill, but it lays out, lays out that process without, I'm open for questions.

  2. Sen. J. Stuart Adams (presiding)53:00

     Thank you Senator Macal for the presentation. Seeing Senator Fillmore No, seeing, no questions. Going to you for a motion.

  3. Unknown speaker53:08speaker not certain

     Thank you. I move this Bill pass.

  4. Sen. J. Stuart Adams (presiding)53:10

     Thank you. And the question is, shall house Bill three eighty two pass. Roll call vote.

  5. Unknown speaker (roll call)53:14

     Senator Balderree Lewin Aye. Brammer bus Cuomo es Gilmore. Grover Harper Hankins Ipson Johnson k Juab McKay Mikel Milner Musselman Owens Pitcher Pitcher Plum Rebe Sandal Stevenson Stratton Bickers Weiler Wilson Winterton, president Adams

  6. Sen. J. Stuart Adams (presiding)54:02

     House Bill 3 82. Having received 27 a votes, zero nay votes two being absent passes, this body will be signed by the president. Return to the house for the signature. The speaker. Senator Fillmore.

  7. Sen. J. Stuart Adams (presiding)54:23

     All in favor say aye. Aye. Aye. Any opposed? Rule The motion passes. The bill is Uncircled.

  8. Sen. J. Stuart Adams (presiding)54:29

     Senator Fillmore.