SF 2497 (LSB 5531SV (4) 91)

PROVIDING FOR AN ASSIGNMENT OF ASSETS FOR THE BENEFIT OF  CREDITORS, EXEMPTING THE RELATED TAX ON THE TRANSFER OF REAL  ESTATE, AND INCLUDING EFFECTIVE DATE PROVISIONS. 

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

DIVISION I
PRINCIPAL PROVISIONS

    Section 1.  NEW SECTION.  681A.1  Title.
   This chapter may be cited as the “Uniform Assignment for Benefit of Creditors Act”.

    Sec. 2.  NEW SECTION.  681A.2  Definitions.
   As used in this chapter, unless the context otherwise requires:
   1.  “Affiliate” means any of the following:
   a.  A person that directly or indirectly owns, controls, or holds, with power to vote, twenty percent or more of the outstanding voting interests of another person, other than a person that holds the interests as any of the following:
   (1)  In a fiduciary or agency capacity without sole discretionary power to vote the interests.
   (2)  Solely to secure a debt, if the person has not in fact exercised the power to vote.
   b.  A person with twenty percent or more of the person’s outstanding voting interests directly or indirectly owned, controlled, or held, with power to vote, by another person.
   c.  A person whose business is operated under a lease or operating agreement by another person, or a person substantially all of whose assets are controlled by the other person.
   d.  A person that operates the business or substantially all the assets of another person under a lease or operating agreement.
   2.  a.  “Asset” means a legal or equitable interest in property of an assignor, regardless of the person holding or in possession, custody, or control of the property or where the property is located.
   b.  “Asset” does not include any of the following:
   (1)  A legal or equitable interest in property restricted from assignment if the restriction is effective under other law, unless the other law permits assignment with the consent of another person and the person consents to the assignment in a manner permitted by the other law.
   (2)  If the assignor is an individual, a legal or equitable interest in property to the extent it is exempt from legal process under other law.
   3.  “Assigned asset” means an asset transferred under an assignment.
   4.  “Assignee” means a person to which assets are transferred under an assignment.
   5.  “Assignment” means a transfer by a person of all the person’s assets to another person for the benefit of the transferor’s creditors.
   6.  “Assignment agreement” means an agreement that transfers or provides for a transfer of all the assignor’s assets.
   7.  “Assignment estate” means the assets held at a given time by the assignee under an assignment.
   8.  “Assignor” means a person whose assets are transferred under an assignment.
   9.  “Claim” means a creditor’s right to payment or to an equitable remedy, regardless of whether the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured.
   10.  “Cohabitant” means each of two individuals not married to each other who live together as a couple after each has reached the age of majority or been emancipated.
   11.  “Creditor” means a person that has a claim against an assigned asset or the assignor.
   12.  “Electronic” means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.
   13.  “Good faith” means honesty in fact and the observance of reasonable commercial standards of fair dealing.
   14.  “Insider” includes any of the following:
   a.  In the case of an individual, any of the following:
   (1)  A relative of the individual.
   (2)  A partnership or limited liability company in which the individual is a general partner or managing member.
   (3)  An organization of which the individual is a director, officer, or person in control.
   b.  In the case of an organization, any of the following:
   (1)  A director, officer, manager, or other person in control of or with controlling equity interest in the organization.
   (2)  A partnership or limited liability company in which the organization is a general partner or managing member.
   (3)  A general partner or managing member of the organization.
   (4)  A relative of a general partner, managing member, director, officer, manager, or other person in control of or with controlling equity interest in the organization.
   c.  An affiliate.
   d.  A managing agent of an organization.
   15.  “Lien” means an interest in an asset that secures payment or performance of an obligation.
   16.  “Organization” means a person other than an individual.
   17.  “Perfected lien” means a lien on any of the following:
   a.  Real property other than fixtures on which a bona fide purchaser of the property cannot acquire an interest superior to the interest of the lienholder.
   b.  Fixtures or property other than real property on which a creditor cannot acquire a lien by attachment, levy, or the like that is superior to the interest of the lienholder.
   18.  a.  “Person” means an individual, estate, business or nonprofit entity, government or governmental subdivision, agency, or instrumentality, or other legal entity. 
   b.  “Person” includes a protected series, however denominated, of an entity if the protected series is established under law that limits, or limits if conditions specified under law are satisfied, the ability of a creditor of the entity or of any other protected series of the entity to satisfy a claim from assets of the protected series.
   19.  “Proof of claim” means a record a creditor submits to an assignee to evidence the creditor’s claim.
   20.  “Record” means information that is any of the following:
   a.  Inscribed on a tangible medium.
   b.  Stored in an electronic or other medium and retrievable in perceivable form.
   21.  “Relative” means an individual related by affinity or consanguinity within the third degree or a cohabitant.
   22.  “Security interest” means a lien created by an agreement.
   23.  “Send”, in connection with a record or notification, means any of the following:
   a.  To deposit in the mail, deliver for transmission, or transmit by any other usual means of communication, with postage or cost of transmission provided for, addressed to any address reasonable under the circumstances.
   b.  To cause the record or notification to be received within the time it would have been received if properly sent under paragraph “a”.
   24.  “Sign” means, with present intent to authenticate or adopt a record by doing any of the following:
   a.  To execute or adopt a tangible symbol.
   b.  To attach to or logically associate with the record an electronic symbol, sound, or process.
   25.  a.  “State” means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any other territory or possession subject to the jurisdiction of the United States.
   b.  “State” includes a federally recognized Indian tribe.
   26.  “Transfer” means disposing of or parting with an asset or with an interest in an asset, regardless of whether the disposition or parting is indirect, conditional, or involuntary.
    Sec. 3.  NEW SECTION.  681A.3  Scope.
   This chapter applies to an assignment made by an assignor that is any of the following:
   1.  An organization whose principal place of business is in this state. 
   2.  An organization whose internal affairs are governed by other law of this state.
   3.  An individual whose principal residence is in this state.
   4.  An organization wholly owned, directly or indirectly, by an assignor that satisfies subsection 1, 2, or 3.
   5.  An organization, if all of the following apply:
   a.  It is partly owned, directly or indirectly, and controlled by an assignor that satisfies subsection 1, 2, or 3.
   b.  It has no place of business or employees.
   c.  It relies on the services the organization receives from an assignor that satisfies subsection 1, 2, or 3.
    Sec. 4.  NEW SECTION.  681A.4  Requirements for assignee and assignment agreement.
   1.  An assignee must be all of the following:
   a.  A person that is not a creditor, affiliate, or insider of the assignor.
   b.  A person that is not an affiliate or insider of a creditor of the assignor.
   c.  A person that does not have a claim against the assignment estate, other than a claim for fees and expenses to be paid under the assignment agreement.
   d.  A person that does not have a material financial interest in the outcome of the assignment, other than a claim for fees and expenses to be paid under the assignment agreement.
   e.  A person that does not hold an equity interest in the assignor other than a noncontrolling interest in a publicly traded company.
   f.  A person that is not an affiliate of a person that fails to satisfy paragraph “a”, “b”, “c”, “d”, or “e”.
   2.  A person that satisfies subsection 1 is not precluded from being an assignee merely because the person performed services for the assignor before the assignment.
   3.  An assignment agreement must be in a record signed by the assignor and the assignee. The record must do all of the following:
   a.  State the name and address of the assignor and of the assignee.
   b.  Transfer or provide for a transfer of all the assignor’s assets.
   c.  Describe the assigned assets in sufficient detail to identify the assets.
   d.  Provide for the distribution of the assignment estate.
   e.  Describe the fees to be charged by the assignee in connection with the assignment, including the basis on which they are to be calculated.
   f.  Include a representation by the assignor, under penalty of perjury, that the assignor is assigning all the assignor’s assets.
   4.  If an assignee relies in good faith on the assignor’s representation made under subsection 3, paragraph “f”, all the assignor’s assets are deemed to be assigned, even if the representation is inaccurate.
    Sec. 5.  NEW SECTION.  681A.5  Effect of assignment —— when assignment agreement effective.
   1.  An assignee obtains the rights, title, and interests of the assignor in the assigned assets.
   2.  If the assignor is an organization, an assignee obtains the rights, title, and interests of the assignor in assets acquired after the assignment.
   3.  Except as provided in section 681A.10, subsection 2, paragraph “l”, an assignee takes each assigned asset subject to an existing interest in the asset held by another person.
   4.  An assignee holds the assigned assets subject to the assignee’s duties under section 681A.9.
   5.  An assignment is subject to other law under which the assignment may be fraudulent or otherwise voidable.
   6.  The effective date of an assignment agreement is the date the agreement is signed by the last party to the agreement that is required to sign the agreement unless a later date is identified in the agreement as the effective date.
    Sec. 6.  NEW SECTION.  681A.6  Filing, recording, and title transfer requirements.
   1.  In this section, “financing statement” has the same meaning as defined in section 554.9102, subsection 1.
   2.  An assignee of a legal or equitable interest in personal property shall file a financing statement in the filing office of any of the following:
   a.  This state established for purposes of section 554.9501, subsection 1, paragraph “b”.
   b.  Any other state in which any of the following apply:
   (1)  The assignor would be located under section 554.9307 if the assignor were a debtor for the purpose of that section.
   (2)  An asset of the assignment estate may be located.
   3.  A financing statement filed under subsection 2 must indicate that it is filed in connection with an assignment.
   4.  When filing a financing statement under subsection 2, the assignee must do any of the following:
   a.  Attach a copy of the assignment agreement to the financing statement.
   b.  State on the financing statement that a copy of the assignment agreement is available on request to the assignee.
   5.  A financing statement filed under subsection 2 may do any of the following:
   a.  Designate the assignor as “debtor” and the assignee as “secured party”.
   b.  Use the terms “assignor” and “assignee” or words of similar import.
   6.  The filing of a financing statement under subsection 2 is not itself a factor in determining whether an asset secures an obligation. The rights of the assignee under the assignment are not affected if the assignee does not file a financing statement under subsection 2.
   7.  An assignee of a legal or equitable interest in real property shall record the assignment of the interest or notice of the assignment under the real estate recording law of the jurisdiction where the property is located.
   8.  An assignee shall comply with other law governing the transfer of title to an asset.
   9.  By signing an assignment agreement, the assignor authorizes the assignee to take the actions required by this section.
    Sec. 7.  NEW SECTION.  681A.7  Notification to creditors.
   1.  Unless a creditor waives in a signed record the right to notification, an assignee shall send a notification of the assignment to each creditor known to the assignee within a reasonable time not to exceed thirty days after the effective date of the assignment agreement.
   2.  The notification must satisfy all of the following requirements:
   a.  Be in a record signed by the assignee.
   b.  Include the assignee’s name, address, and other contact information reasonably necessary to communicate with the assignee.
   c.  Provide reasonable instructions for submitting a proof of claim using the method established by the assignee under section 681A.9, subsection 2, paragraph “e”.
   d.  Identify the date established under section 681A.9, subsection 2, paragraph “f”, by which each creditor whose claim is not otherwise allowed without a timely proof of claim under this chapter must submit a proof of claim.
   3.  An assignee shall use reasonable means to provide the information in subsection 2 to unknown creditors, including by any means the assignor regularly used to do any of the following:
   a.  Provide information to the assignor’s creditors.
   b.  Communicate information about the assignor, other than advertising, to the public.
    Sec. 8.  NEW SECTION.  681A.8  Duties of assignor.
   1.  Subject to section 681A.23, an assignor has a duty to take all reasonable actions necessary for the assignee to administer the assignment, the assigned assets, and the assignment estate. 
   2.  In furtherance of the duty under subsection 1, the assignor shall do all of the following:
   a.  Preserve and turn over to the assignee the assigned assets in the assignor’s possession or control.
   b.  Provide to the assignee information reasonably necessary to administer the assignment, the assigned assets, and the assignment estate.
   c.  Sign any record reasonably necessary to transfer an assigned asset and comply with any notarization required under other law.
   d.  Designate, and provide the assignee with the name, address, and other contact information reasonably necessary to communicate with, an appropriate person willing and able to act as a representative on behalf of the assignor as may be reasonably necessary to administer the assignment, the assigned assets, and the assignment estate.
   e.  If the assignment includes a legal or equitable interest in real property or titled personal property, cooperate with the assignee in taking actions under section 681A.6.
   f.  On or as soon as practicable after the effective date of the assignment agreement, provide the assignee with all of the following:
   (1)  A list of all assets.
   (2)  A list of all the assignor’s employees, including those whose employment is terminated in connection with the assignment.
   (3)  A list of all the assignor’s known creditors, including, for each creditor, the creditor’s address and other contact information reasonably necessary to communicate with the creditor.
   g.  A verification under penalty of perjury the accuracy of the lists required under paragraph “f”.
   h.  With respect to a legal or equitable interest in property restricted from assignment, cooperate with the assignee to obtain consent from a person whose consent to assign the interest is necessary under other law.
   i.  Provide assistance to the assignee as required by the assignment agreement.
   3.  The duties in this section also apply to a representative designated under subsection 2, paragraph “d”.
    Sec. 9.  NEW SECTION.  681A.9  Duties of assignee.
   1.  Subject to section 681A.23, an assignee has a fiduciary duty to the assignment estate for the benefit of creditors to do all of the following:
   a.  Provide a duty of loyalty, including the duty to manage the assignment in good faith.
   b.  Use reasonable care to maximize distributions under section 681A.15.
   c.  Wind up the assignment under section 681A.19 in a manner compatible with the best interests of the assignment estate and creditors.
   2.  Without limitation on the duties under subsection 1, and subject to section 681A.23, the assignee also has a duty to do all of the following:
   a.  Maintain a separate deposit account for funds related to the assignment.
   b.  Collect on or dispose of each assigned asset, unless the assignee determines it is more economically efficient to abandon the asset.
   c.  Prepare and retain appropriate business records, including a record of each receipt, disbursement, and collection on or disposition of an assigned asset.
   d.  Pay administrative expenses of the assignment estate, to the extent the assignment estate has sufficient unencumbered assets.
   e.  Establish a method that is reasonably designed to permit a creditor to submit a proof of claim.
   f.  Establish a single date by which creditors whose claims are not otherwise allowed without timely proofs of claim under this chapter must submit proofs of claim, which must be one hundred twenty days after the effective date of the assignment agreement.
   g.  Unless a claim would receive minimal or no distribution without regard to the claim’s validity or asserted priority, examine the validity and priority of claims against the assignment estate and, if necessary, consult with the representative designated by the assignor under section 681A.8, subsection 2, paragraph “d”.
   h.  At least every six months, provide to each creditor a summary of the assets, liabilities, and expenses of the assignment estate.
   i.  Comply with all requirements of the United States internal revenue service and state and local taxing authorities.
   j.  Send a notification to each creditor of the assignee’s compensation and any change in the method of determining the assignee’s compensation from the method provided in the assignment agreement.
   k.  Send a final accounting under section 681A.19, subsection 1.
   l.  Comply with the other requirements imposed on the assignee under this chapter.
    Sec. 10.  NEW SECTION.  681A.10  Powers of assignee.
   1.  An assignee has the powers necessary or appropriate to perform the assignee’s duties.
   2.  Unless the assignment agreement expressly provides otherwise, the assignee has power to do any of the following:
   a.  Operate an existing business that uses an assigned asset, including preservation of the asset and collection on, or the sale, lease, license, or other disposition of, the asset.
   b.  Incur secured or unsecured debt and pay expenses incidental to the exercise of the power under subsection 1.
   c.  Assert a right, claim, cause of action, or defense the assignor could have asserted that relates to the assignment estate.
   d.  Engage professionals, including a professional previously engaged by the assignor, to give advice, to prosecute or defend litigation, or for other purposes as the assignee considers appropriate, and pay professionals reasonable fees for services from the assignment estate.
   e.  Collect on, or sell, lease, license, or otherwise dispose of, an asset of the assignment estate regardless of whether the asset is subject to a lien or other encumbrance.
   f.  Exercise a right to redeem an asset of the assignment estate that is subject to a mortgage, deed of trust, security interest, or other encumbrance.
   g.  Settle a matter involving a debtor of the assignor.
   h.  Prosecute or defend a litigation pending on the effective date of the assignment agreement in favor of or against the assignor in the manner and with the same effect as the assignor could have done if the assignment had not been made.
   i.  Recover an asset in the manner and with the same effect as the assignor could have done if the assignment had not been made.
   j.  Settle claims against the assignment estate.
   k.  Abandon an assigned asset.
   l.  Subject to subsections 3 and 5, avoid a transfer or the incurrence of an obligation which a creditor that has filed a proof of claim could have avoided under other law if the assignment had not been made.
   m.  Invest funds, subject to applicable prudent investor standards under other law.
   3.  The power under subsection 2, paragraph “1”, is exclusive to the assignee with respect to a creditor that submits a proof of claim. A recovery by the assignee in the exercise of this power must be for the benefit of the assignment estate but may not exceed the amount, asset, or other value the creditor could have obtained by the avoidance.
   4.  For the purpose of exercising the assignee’s power under subsection 2, paragraph “1”, exercising a voidable-transaction remedy, or otherwise establishing the priority of the assignee’s interest, an assignee has a lien on the assignment estate and the status of all of the following:
   a.  A lien creditor under section 554.9102, subsection 1, paragraph “be”, subparagraph (2), as to an asset that is a legal or equitable interest in personal property or fixtures.
   b.  A bona fide purchaser as to an asset that is a legal or equitable interest in real property, other than fixtures, located in this state.
   c.  A bona fide purchaser under the law of another state as to an asset that is a legal or equitable interest in real property, other than fixtures, located in the other state.
   5.  An assignee’s power under subsection 2, paragraph “1”, to avoid a transfer made before the effective date of the assignment agreement, under or in connection with a swap agreement, securities contract, commodity contract, forward contract, repurchase agreement, or master netting agreement, is limited to the extent a trustee would not have the power to avoid the transfer under the federal bankruptcy code, 11 U.S.C. §101 et seq., as amended.
   6.  An assignee shall exercise the powers under this section consistent with the assignee’s fiduciary duty under section 681A.9, subsection 1.
    Sec. 11.  NEW SECTION.  681A.11  Allowed claim.
   1.  An assignee shall allow a creditor’s claim if all of the following apply:
   a.  The creditor submits a proof of claim in compliance with section 681A.13.
   b.  The assignee does not dispute the claim under section 681A.12 before final distribution.
   2.  An assignee may do any of the following:
   a.  Allow a claim, pay a known liquidated claim, or accept a notice to the assignee of a claim received by the date established by the assignee under section 681A.9, subsection 2, paragraph “f”, even if the creditor does not submit a proof of claim.
   b.  Allow and pay a claim evidenced by a late-filed proof of claim, if the assignee determines there is a reasonable basis for excusing the late filing.
   3.  Any unsecured portion of an allowed claim shall be valued as of the effective date of the assignment agreement.
   4.  A creditor’s claim is allowed if the creditor succeeds in a dispute under section 681A.12, subsection 2.
   5.  Subject to subsection 6, after expiration of the time for submitting a proof of claim, the assignee shall create a complete list of creditors that have submitted a proof of claim in compliance with section 681A.13. For each creditor’s claim, the list must state all of the following:
   a.  The amount of the claim, if the amount is known to the assignee.
   b.  Whether the claim is secured or unsecured and, if secured, describe the collateral for the claim.
   6.  If a class of creditors will receive no distribution on account of allowed claims, the assignee shall send a notice in a record to each creditor in that class that the creditor will receive no distribution instead of the list required in subsection 5.
   7.  If requested by a creditor or other party with an interest in the assignment estate, the assignee shall provide the list created under subsection 5 to the person making the request to the extent permitted by privacy laws and subject to any privacy safeguards the assignee determines in the assignee’s business judgment are reasonably necessary.
    Sec. 12.  NEW SECTION.  681A.12  Disputed and disallowed claims.
   1.  An assignee may dispute a creditor’s claim before final distribution by sending notification in a record stating the nature of the assignee’s dispute to the creditor.
   2.  If a dispute cannot be resolved consensually, the assignee may commence a proceeding under section 681A.21 to disallow the claim. The assignee must commence the proceeding before final distribution under section 681A.15. If the proceeding is not filed before final distribution, the assignee shall allow the claim under section 681A.11.
   3.  An assignee shall create a dollar-for-dollar reserve for the estimated amount of the potential distribution on a disputed claim.
   4.  Subject to subsection 2, an assignee shall disallow a claim for reimbursement or contribution of a person that is liable with the assignor on, or that has secured, the claim, to the extent:
   a.  The claim against the assignment estate is disallowed.
   b.  The claim for reimbursement or contribution is contingent as of the time of allowance or disallowance.
   c.  The person asserts a right of subrogation to the rights of a creditor.
   5.  A claim for reimbursement or contribution of a person liable with the assignor on, or that has secured, the claim that becomes fixed after the effective date of the assignment agreement shall be determined, and shall be allowed or disallowed, subject to subsection 2, as if the claim had become fixed before the effective date of the assignment agreement.
   6.  An assignee may reconsider the assignee’s decision to allow or disallow a claim for cause. If a reconsidered claim is allowed under section 681A.11, before the assignee makes additional payments or transfers to other creditors that are equal or junior in priority under section 681A.15 to the reconsidered claim, the creditor with the reconsidered claim shall receive a payment or transfer in an amount proportionate in value to the payments or transfers already received by the other creditors. This subsection does not modify the assignee’s right under other law to recover from a creditor an excess payment or transfer made to the creditor. If a reconsidered claim is disallowed, the assignee shall comply with subsections 2 and 3.
    Sec. 13.  NEW SECTION.  681A.13  Proof of claim.
   1.  A proof of claim must do all of the following:
   a.  State the name, address, and other contact information reasonably necessary to communicate with the creditor.
   b.  State the amount of the claim.
   c.  Briefly state the nature of the claim.
   d.  Identify any asset of the assignment estate securing the claim.
   e.  Be signed by the creditor under penalty of perjury.
   f.  Include a copy of a record, if any, on which the claim is based.
   g.  Be submitted using the method established under section 681A.9, subsection 2, paragraph “e”.
   h.  Be submitted by the date established by the assignee under section 681A.9, subsection 2, paragraph “f”.
   2.  A proof of claim submitted in compliance with this section is prima facie evidence of the validity and amount of the claim.
   3.  The submission by a creditor of a proof of claim in compliance with this section constitutes all of the following:
   a.  The creditor’s consent to the jurisdiction of the court under section 681A.21.
   b.  Assignment to the assignee of any right of the creditor to bring a voidable transaction action relating to the creditor’s claim.
    Sec. 14.  NEW SECTION.  681A.14  Rights of transferees.
   1.  An assignee’s disposition of an asset does all of the following:
   a.  Transfers to a transferee for value all of the assignee’s rights in the asset.
   b.  Discharges the assignee’s lien and, to the extent the assignment creates a security interest in favor of the assignee, the assignee’s security interest.
   c.  Discharges any subordinate security interest or other lien subordinate to the assignee’s lien.
   2.  A transferee that acts in good faith takes free of the rights and interests described in subsection 1, even if the assignee fails to comply with this chapter or the requirements of a judicial proceeding.
   3.  If a transferee does not take free of the rights and interests described in subsection 1, the transferee takes the asset subject to all of the following:
   a.  The assignee’s rights in the assets of the assignment estate.
   b.  The assignee’s lien and, if applicable, security interest.
   c.  Any other security interest or other lien.
   4.  Unless otherwise provided in a record, any warranty arising by operation of other law is disclaimed to the extent permitted by other law.
   5.  If a subordinate security interest or other lien is discharged under this section, the assignee may file a record with the official or office responsible for maintaining an official filing, recording, registration, or certificate-of-title system covering the asset secured by the security interest or other lien. The record must state that the security interest or other lien is discharged as a subordinate security interest or other lien in connection with a disposition under an assignment for the benefit of creditors of the assignor whose asset is subject to the security interest or other lien.
    Sec. 15.  NEW SECTION.  681A.15  Distributions.
   1.  In this section, “protected secured creditor” means a secured creditor, if all of the following apply to the secured creditor’s lien:
   a.  It is a perfected lien.
   b.  It cannot be avoided by the assignee under section 681A.10, subsection 2, paragraph “l”.
   c.  It is not subordinate to the assignee’s lien.
   2.  Except as provided in section 681A.16, the assignee shall pay claims from the assignment estate allowed under section 681A.11 in the order of priority stated in this section.
   3.  Unless otherwise agreed between the assignee and a protected secured creditor, before distributions under subsections 4, 5, 6, and 7, and in accordance with the priorities of creditors with liens under other law, the protected secured creditor shall receive the asset or the proceeds from the collection on or disposition of the asset to the extent of the value of the protected secured creditor’s interest in the asset, less the assignee’s reasonable and necessary expenses of preserving or disposing of the asset to the extent the expenses benefit the protected secured creditor and are incurred with the protected secured creditor’s consent or acquiescence. The protected secured creditor has an unsecured claim under subsection 7, paragraph “b”, for the amount of the claim that remains after deducting the amount or value of an asset the protected secured creditor receives under this subsection. To the extent a claim is secured by an asset the value of which, after the deductions provided under this subsection, is greater than the amount of the claim, the protected secured creditor may receive interest on the claim and any reasonable fees, costs, or charges provided for under the agreement or other law under which the claim arose.
   4.  After the distributions under subsection 3, the assignee shall pay the necessary costs of the administration of the assignment estate. The costs include all of the following:
   a.  Fees and reimbursements of the expenses of the assignee and any professionals engaged by the assignee.
   b.  Post-assignment taxes incurred by the assignee.
   c.  Post-assignment rent incurred by the assignee in occupying premises on which assets of the assignment estate are located or the business of the assignor is conducted.
   d.  Post-assignment lease payments incurred by the assignee in renting personal property used in the business of the assignor.
   e.  Amounts required to be paid under the assignment agreement for expenses of winding up the assignment under section 681A.19.
   5.  After the distributions under subsections 3 and 4, the assignee shall pay claims entitled to priority under federal law including under 31 U.S.C. §3713, as amended, from the assignment estate.
   6.  After the distributions under subsections 3, 4, and 5, the assignee shall pay claims from the assignment estate for wages, salaries, or commissions earned not more than one hundred eighty days before the earlier of the effective date of the assignment agreement or the cessation of the assignor’s business. Payment shall be limited to the greater of the following:
   a.  The amount of the claim allowed as a priority claim ahead of claims of other unsecured creditors under the federal bankruptcy code, 11 U.S.C. §101 et seq., as amended.
   b.  The amount allowed as a priority claim ahead of claims of other unsecured creditors under applicable nonbankruptcy law.
   7.  After the distributions under subsections 3, 4, 5, and 6, each creditor shall receive a distribution of the assets of the assignment estate in the following order of priority:
   a.  Unsecured claims entitled to priority ahead of claims of other unsecured creditors under other law.
   b.  Unsecured claims not entitled to priority.
   8.  If the assets available for distribution to claims with equal priority under subsection 7 are insufficient to pay the total amount of the claims with that priority, each creditor with a claim with that priority shall receive a pro rata distribution of the available assets based on the proportion the amount of the creditor’s claim bears to the total amount of the claims with that priority.
   9.  If the claims entitled to the distribution under subsections 3, 4, 5, 6, and 7 are paid in full, the residue shall be distributed to allowed claims evidenced by a late-filed proof of claim, other than a late-filed claim allowed by the assignee under section 681A.11, subsection 2, paragraph “b”, and, after the allowed claims evidenced by a late-filed proof of claim have been paid in full, as provided in the assignment agreement.
   10.  An assignee may make interim distributions after considering future expenses and the reserves for disputed claims established under section 681A.12, subsection 3.
    Sec. 16.  NEW SECTION.  681A.16  Claim subordination.
   1.  A subordination agreement is enforceable under this chapter to the same extent the agreement is enforceable under other law.
   2.  Subject to subsection 3, all of the following claims are subordinate to a claim or interest that is senior or equal in priority to a claim or interest represented by a security or other equity interest in the assignor or an affiliate of the assignor:
   a.  A claim arising from rescission of a purchase or sale of the security or other equity interest.
   b.  A claim for damages arising from the purchase or sale of the security or other equity interest.
   c.  A claim for reimbursement or contribution allowed on account of the rescission or damage claim.
   3.  If the security is common stock or another common equity interest, a claim subject to subordination under subsection 2 has the same priority as common stock or another common equity interest.
    Sec. 17.  NEW SECTION.  681A.17  Liability.
   1.  An assignor is not personally liable for an act or omission by the assignee.
   2.  An assignee is not personally liable for an act or omission by the assignor.
   3.  A representative designated by an assignor under section 681A.8, subsection 2, paragraph “d”, is exculpated to the same extent as a person acting on behalf of the assignor under other law had there been no assignment, except for an act or omission resulting from the representative’s gross negligence or willful misconduct.
   4.  A term of an assignment agreement relieving the assignee of liability is unenforceable to the extent the agreement relieves the assignee of liability for an act or omission committed in bad faith or with reckless indifference to the purposes of the assignment or the interests of the creditors of the assignment estate.
   5.  Subject to subsection 6, an assignee is personally liable for breach of a fiduciary duty under section 681A.9, subsection 1. If the assignee is liable all of the following apply:
   a.  The assignee is personally liable to a creditor for an individualized harm to the creditor if the harm is not shared by all creditors or a class of creditors.
   b.  The assignee is personally liable to the assignment estate for a harm shared by all creditors or a class of creditors.
   6.  An assignee is not liable if, in the performance of the assignee’s duties and exercise of the assignee’s powers, the assignee relies in good faith on any of the following:
   a.  A record of the assignor.
   b.  Information, an opinion, a report, or a statement presented to the assignee by the assignor’s officer or employee, a committee of the assignor’s board of directors, an independent director or manager of the assignor, or another representative of the assignor.
   c.  Information, an opinion, a report, or a statement presented to the assignee by another person that has been selected with reasonable care by or on behalf of the assignee as to a matter the assignee reasonably believes is within the other person’s professional or expert competence.
    Sec. 18.  NEW SECTION.  681A.18  Assignee removal —— successor assignee.
   1.  The assignor or a creditor may request the district court to remove the assignee, if the assignor or creditor has a reasonable belief grounds for removal exist under subsection 2.
   2.  After a request under subsection 1 or on the district court’s initiative in an action pending before the court under section 681A.21, the court may remove an assignee based on any of the following: 
   a.  For cause, including the assignee’s fraud, dishonesty, incompetence, gross mismanagement, or failure to comply with this chapter.
   b.  If removal of the assignee best serves the interests of the creditors.
   3.  After an assignee resigns, or is removed, dies, or becomes incapacitated, a successor assignee provided for in the assignment agreement becomes the assignee, unless the successor assignee is not eligible to be an assignee under section 681A.4, subsection 1, or is subject to removal under subsection 2. A court shall appoint a successor assignee if any of the following apply:
   a.  The assignment agreement does not provide for a successor assignee.
   b.  The successor assignee provided for in the assignment agreement is ineligible to be an assignee under section 681A.4, subsection 1, or is subject to removal under subsection 2.
   4.  Subject to section 681A.17, an assignee that resigns, or is removed, dies, or becomes incapacitated, is discharged from the assignee’s duties under this chapter when the assignee, or a representative of a deceased or incapacitated assignee does all of the following:
   a.  Accounts for and turns over to the successor assignee all assets of the assignment estate.
   b.  Submits to creditors a report summarizing the receipts and disbursements made during the service of the assignee.
   5.  Subject to an applicable privilege, a court may order an attorney, accountant, or other person that has information in a record relating to the assignment estate or the assignor’s financial affairs to turn over or disclose the record to the successor assignee.
    Sec. 19.  NEW SECTION.  681A.19  Winding up.
   1.  On completion of an assignee’s duties, the assignee shall send a creditor whose claim is allowed under section 681A.11, and not satisfied in full, a final accounting sufficient to inform the creditor of all material aspects of the assignment, including all of the following:
   a.  A description of the actions taken by the assignee under the assignment.
   b.  A summary of the assets received by the assignee at the commencement of the assignment and the assets received by the assignee during the assignment.
   c.  A summary of disbursements made by the assignee during the assignment for the purpose of administering the assignment estate, including the fees charged by the assignee, and payments to professionals, for rent, and for business purchases.
   d.  A summary of collections and dispositions of assets by the assignee.
   e.  A summary of distributions made or proposed to be made by the assignee for creditor claims.
   f.  A description of additional work to be done by the assignee to complete the administration of the assignment estate and the distributions under section 681A.15.
   g.  Other information considered reasonably necessary by the assignee.
   2.  Except as otherwise provided in the final accounting or if the assignee has not fulfilled the assignee’s duties under this chapter, the assignee is discharged from the assignee’s duties under this chapter when the assignee sends the final accounting and distributes all the assets of the assignment estate.
   3.  If the final accounting describes additional work under subsection 1, paragraph “f”, the assignee shall exercise the powers appropriate to complete the work.
   4.  Upon completion of the assignee’s duties, the assignor is entitled to obtain or effect the termination of any financing statement filed by the assignee under section 681A.6 to the same extent that a debtor would be entitled to obtain or effect the filing of a termination statement under section 554.9509, subsection 4, paragraph “b”, or section 554.9513 upon satisfaction of the secured obligations.
    Sec. 20.  NEW SECTION.  681A.20  Interstate matters.
   1.  Subject to subsection 2, an assignment made under the law of another state must be recognized and enforced on an issue if the result for the issue would be substantially similar to the result for the issue if the assignment had been made under this chapter.
   2.  If a claim for wages, salaries, or commissions or a claim of a governmental unit exists in another state, for the purpose of determining the priority of the claim under section 681A.15, subsection 6, paragraph “b”, the assignee shall use the amount asserted or determined under the law of the other state.
   3.  If an assignee determines that a creditor should receive the treatment the creditor would receive under an assignment made under the law of another state, the assignee may treat the creditor as the creditor would be treated in the other state.
    Sec. 21.  NEW SECTION.  681A.21  Court action.
   1.  A district court may hear and resolve a matter involving the administration of an assignment or the exercise of an assignee’s powers and duties, including a request for instructions or approval or to declare rights.
   2.  Without limiting the rights of the assignee or a creditor or other interested person to request the court to hear or resolve a matter under subsection 1, on request of the assignee, the court may issue an order relating to the administration of the assignment or the exercise of the assignee’s powers and duties, including an order for disposition of an asset or the incurrence of an obligation.
   3.  Acceptance of the assignment by the assignee constitutes the assignee’s consent to the jurisdiction of the court.
    Sec. 22.  NEW SECTION.  681A.22  Ancillary assignee.
   1.  Subject to other law of this state governing a person from another state serving as a fiduciary in this state, the district court may appoint a person serving as an assignee in an assignment in another state, or the person’s nominee, as an ancillary assignee relating to assigned assets located in this state or subject to the jurisdiction of a court in this state, if all of the following apply:
   a.  The person or nominee would be eligible to serve as an assignee under section 681A.4.
   b.  The appointment furthers the person’s possession, custody, control, or disposition of an assigned asset under the assignment in the other state.
   2.  The court may issue an order that implements an order entered in another state appointing or directing an assignee or otherwise concerning an assignment in the other state.
   3.  Unless the court orders otherwise, an ancillary assignee appointed under subsection 1 has the rights, powers, and duties of an assignee appointed under this chapter.
   4.  A person in possession, custody, or control of an assigned asset in this state, other than a creditor holding a lien or a right of setoff or recoupment relating to the asset, shall, on notification in a record by an ancillary assignee appointed under subsection 1, turn over the asset to the ancillary assignee.
    Sec. 23.  NEW SECTION.  681A.23  Provisions variable by agreement.
   1.  Except as provided in this section and section 681A.10, subsection 2, the provisions of this chapter shall not be varied by agreement.
   2.  The duties under section 681A.8, subsection 1, and section 681A.9, subsection 1, shall not be disclaimed by agreement. An assignor and the assignee may determine by agreement the standards measuring the fulfillment of the duties of the assignor under section 681A.8 and the assignee under section 681A.9 if the standards are not manifestly unreasonable.
   3.  Except as provided in section 681A.17, subsection 4, the assignment agreement may limit the assignee’s liability under section 681A.17 and may require the assignee be indemnified by the assignment estate.
   4.  Except as provided under section 681A.7, subsection 1, whenever this chapter requires an action to be taken within a reasonable time, a time not manifestly unreasonable may be fixed by agreement.
   5.  The assignment agreement may provide for duties of the assignee in addition to those in this chapter.
    Sec. 24.  NEW SECTION.  681A.24  Uniformity of application and construction.
   In applying and construing this uniform act, a court shall consider the promotion of uniformity of the law among states that enact it.
    Sec. 25.  NEW SECTION.  681A.25  Relation to Electronic Signatures in Global and National Commerce Act.
   This chapter modifies, limits, or supersedes the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. §7001 et seq., as amended, but does not modify, limit, or supersede 15 U.S.C. §7001(c), or authorize electronic delivery of any of the notices described in 15 U.S.C. §7003(b).
    Sec. 26.  NEW SECTION.  681A.26  Transitional provision.
   This chapter applies to an assignment made on or after the effective date of this Act.
    Sec. 27.  REPEAL.  Chapter 681, Code 2026, is repealed.
DIVISION II
COORDINATING PROVISIONS

PART A

FRANCHISES
    Sec. 28.  Section 523H.7, subsection 3, paragraph b, Code 2026, is amended to read as follows:
   b.  All or a substantial part of the assets of the franchise or the business to which the franchisee relates are assigned to or for the benefit of any creditor which is subject to chapter 681 681A. An assignment for the benefit of any creditor pursuant to this paragraph does not include the granting of a security interest in the normal course of business.
    Sec. 29.  Section 537A.10, subsection 7, paragraph c, subparagraph (2), Code 2026, is amended to read as follows:
   (2)  All or a substantial part of the assets of the franchise or the business to which the franchisee relates are assigned to or for the benefit of any creditor which is subject to chapter 681 681A. An assignment for the benefit of any creditor pursuant to this subparagraph does not include the granting of a security interest in the normal course of business.

PART B

JUDICIAL ADMINISTRATION
    Sec. 30.  Section 602.8102, subsection 122, Code 2026, is amended to read as follows:
   122.  Carry out duties relating to the assignment of property for the benefit of creditors as provided in chapter 681 681A.

PART C

TRANSFER TAX

    Sec. 31.  Section 428A.2, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  23.  The transfer of property from an assignor to an assignee pursuant to an assignment agreement under chapter 681A.
DIVISION III
EFFECTIVE DATE
    Sec. 32.  EFFECTIVE DATE.  This Act takes effect January 1, 2027.

______________________________
AMY SINCLAIR
President of the Senate

______________________________
PAT GRASSLEY
Speaker of the House

   I hereby certify that this bill originated in the Senate and is known as Senate File 2497, Ninety-first General Assembly.

______________________________
W. CHARLES SMITHSON
Secretary of the Senate

Approved _______________, 2026

______________________________
KIM REYNOLDS
Governor