When state legislatures consider a legislative bill, it’s important that they hear from stakeholders who would be affected by that bill.

Important ABC Stakeholders

When faced with a legislative bill on assignment for benefit of creditors (“ABC”), its important that legislatures hear from a variety of stakeholders, including this important group:

Recently, the U.S. Supreme Court denied certiorari in two cases involving bankruptcy questions:

An assignment for benefit of creditors (an “ABC”) under the common law is an out-of-court tool for liquidating a business debtor’s assets in an efficient and credible manner.

Such a common law tool has been used, effectively and frequently, for many years in such states as Illinois and California.

Despite the out-of-court nature of an ABC under the common law, courts can still be enlisted to resolve discrete issues that may arise. Here is an example of a court’s involvement, within an ABC under the common law, to resolve an issue of compensation for the ABC assignee:

Here’s a curious thing:

• an advisory opinion from a U.S. Circuit Court of Appeals on an issue for which there is no controversy and that is mostly academic.

That’s exactly what we have in In re Whittaker Clark & Daniels, Inc., Case Nos. 24-2210 & 24-2211 (3rd Cir., decided September 10, 2025)(see first concurring opinion).##

No Controversy

At 11 p.m. on Thursday, December 31, 2020, the United Kingdom left the European Union.

This has since enabled staff in many airports in continental Europe, often with unconcealed delight, to direct British citizens to much longer queues than they would have needed to join had the U.K. remained an EU Member State.

Assignments for benefit of creditors (“ABCs”) and receiverships have been utilized effectively for centuries under the common law, side-by-side as separate and distinct and complementary remedies for liquidating assets.

Differences

Differences between the two are that:

On 1 July, the Court of Appeal overturned the High Court’s decision1 to sanction the restructuring plans proposed by two Petrofac group companies as they did not consider that the benefits of the restructuring had been fairly allocated. 

“[T]his Court finds that the exceptions to discharge under §523(a) only apply to individuals in Subchapter V.”

• Spring, et al. v. Davidson and Blok Industries, Inc. (In re Davidson; In re Blok Industries, Inc.; Jointly Administered), Adv. No. 23-3005, Doc. 87, at 15 (Bankr., N.D. Fla., decided February 14, 2025).

Facts

• “While the pre-petition Debtor may have consented to waiver of the automatic stay in favor of [secured creditor], . . . other creditors did not”; and
• “The automatic stay is designed to protect both debtors and creditors alike.”

In re DJK Enterprises, LLC, Case No. 24-60126, Doc. 196, at 13 (Bankr., S.D. Ill., February 13, 2025).

In re DJK Enterprises

Of particular interest to commercial landlords, the recent decision of the court in SBP 2 SARL v 2 Southbank Tenant Ltd [2025]EWHC 16 (Ch) illustrates the risks to a landlord of simply cross-referring to Section 123 of the Insolvency Act 1986 (respectively, Section 123 and the 1986 Act) in the forfeiture provisions of a lease without specifying any amendments to the statutory language and thereby provides a reminder of the importance of careful and accurate drafting.