Bridging the Gap: Florida’s Assignment for the Benefit of Creditors vs. the New Uniform ABC Act

Assignment for the Benefit of Creditors (ABC) has become one of the most important state‑law tools for dealing with distressed businesses in Florida. Chapter 727 of the Florida Statutes now supports a vibrant, sophisticated ABC practice, giving debtors, creditors, and assignees a well‑defined framework to wind down operations, monetize assets, and distribute value outside of federal bankruptcy court. Recent legislative amendments and bar‑driven refinements have made the statute more practical and predictable in day‑to‑day use, streamlining procedures and strengthening protections for creditors and fiduciaries alike.

At the same time, ABC law across the country remains uneven. Some states have detailed statutes and active case law, while others rely on thin or outdated provisions that leave parties navigating uncertainty—especially when assets and creditors are spread across multiple jurisdictions. In response, the Uniform Law Commission has developed the Uniform Assignment for the Benefit of Creditors Act (Uniform ABC Act), a model law aimed at modernizing and harmonizing ABC practice nationwide. This post explores how Florida’s now‑robust ABC framework fits into that broader landscape and what growing efforts toward uniformity may mean for practitioners and stakeholders who regularly operate in or around Florida.

A Vibrant ABC Practice in Florida

Assignment for the Benefit of Creditors practice in Florida is both mature and active, with Chapter 727 serving as a robust state‑law alternative to federal bankruptcy for liquidating distressed businesses. Over the last decade, Florida’s Legislature and the Business Law Section of The Florida Bar have repeatedly refined the statute, responding to evolving practice and judicial feedback.

Recent amendments have clarified and streamlined core mechanics, including notice procedures, bond requirements, discovery, assignee’s deeds, lease rejection, and objections to claims in an ABC proceeding. For example, the Legislature extended the period during which an assignee can operate the assignor’s business and synchronized statutory deadlines into seven‑day multiples, which better fits modern case‑management practices and gives assignees more realistic time to assess and preserve going‑concern value.

These statutory updates reflect a deliberate policy choice: keep Florida’s ABC regime court‑supervised and creditor‑protective, but also nimble enough to function as a practical, front‑line tool for businesses and lenders looking for a non‑bankruptcy liquidation path. At the same time, Florida practitioners and bar groups have continued to identify “glitches” and pressure points, such as turnover language and assignee liability, and have developed further proposed revisions to keep Chapter 727 aligned with current practice.

From Florida’s Refinements to National Uniformity

While Florida’s ABC practice has grown more sophisticated, ABC law nationwide remains a patchwork, with some states boasting detailed statutes and others relying on sparse provisions or common law. This inconsistency can complicate matters for companies with multi‑state footprints, where an assignment commenced under one state’s law has to contend with assets, contracts, and creditors scattered across jurisdictions with very different ABC frameworks.

To address these disparities, the Uniform Law Commission developed the Uniform ABC Act, a comprehensive model statute intended to modernize and harmonize ABC practice across adopting states. The act defines ABCs as voluntary, debtor‑initiated alternatives to bankruptcy and receiverships and seeks to “provide greater clarity and consistency to the assignment process across the fifty states” by codifying detailed fiduciary duties, clear claims procedures, a defined priority scheme, and rules for interstate assignments and court involvement.

Florida has been part of this broader conversation, with representatives from key jurisdictions—including Florida, California, and Delaware—participating in the Uniform ABC Act drafting process to ensure that the model reflects real‑world restructuring and liquidation practice. Even if a state does not adopt the Uniform ABC Act verbatim, the Uniform ABC Act is expected to serve as a reference point for judges, assignors, assignees, and creditors, offering a common vocabulary and structure that can reduce friction and uncertainty in multi‑state ABCs.

Florida’s Chapter 727: Purpose and Structure

Florida’s ABC statute, Chapter 727, Florida Statutes, states that its intent is to provide “a uniform procedure for the administration and orderly liquidation of insolvent estates” and to ensure full reporting and equitable distribution to creditors. The chapter creates a court‑supervised liquidation framework under which a debtor (the assignor) transfers its non‑exempt assets to an assignee, who then administers and liquidates the estate under judicial oversight.

The 2019 overhaul and related amendments refined several procedural pillars of that framework. Among other changes, the Legislature:

• Extended the default period in which an assignee may conduct the business of the assignor and aligned notice periods with modern time‑computation norms.
• Adjusted bond requirements so the bond is no less than a fixed minimum or double the liquidation value of unencumbered liquid assets, whichever is higher, preventing artificially inflated bond amounts driven by secured or unliquidated debt.
• Clarified procedures for objections to claims, including who must receive service and how negative‑notice procedures may be used, thereby streamlining one of the most fundamental components of an ABC case.

Separate from those enacted amendments, the Business Law Section’s ABC Statute Revision (or “ABC Study Group”) has proposed further refinements described in its “glitch” white paper. Those proposals include clarifying recording obligations, fixing turnover language that inadvertently allows “creditors” in possession of estate property to resist turnover, and codifying protections for assignees, including reliance on court orders and Barton‑style limitations on suits against them.

The Uniform ABC Act: A National Model

On the national stage, the Uniform Law Commission has approved the Uniform ABC Act as a new uniform act meant to bring structure and consistency to ABCs. The act recognizes ABCs as a common, non‑bankruptcy option for distressed businesses but notes that many states’ laws are underdeveloped or silent, leaving parties without clear statutory guidance.

The Uniform ABC Act:

• Codifies the duties and powers of assignors and assignees, framing the assignee as a fiduciary with clearly defined authority to collect, liquidate, and distribute assets.
• Establishes a detailed process for allowing, disputing, and paying claims, coupled with a priority scheme designed to be predictable and broadly compatible with other insolvency regimes.
• Addresses interstate assignments and court involvement, deliberately allowing states to choose how much judicial supervision to require while still operating within a uniform statutory template.

Its overarching goal is to “provide greater clarity and consistency to the assignment process across the fifty states,” making ABCs a more robust, reliable tool when appropriate and reducing the complications businesses face when dealing with different assignment laws across state lines. Once enacted by multiple jurisdictions, the Uniform ABC Act is expected to minimize the need for ad hoc ancillary ABC proceedings and to give creditors and courts a familiar, harmonized structure for dealing with multi‑state estates.

Florida’s Incrementalism vs. Uniform Codification

Florida’s path has been evolutionary: preserve the core features of Chapter 727—court supervision, creditor protection, and a clear liquidation framework—while making targeted amendments that respond to practice realities and judicial concerns. The 2019 amendments and subsequent “glitch‑fix” proposals exemplify that approach, tightening procedural gears without fundamentally altering the system’s architecture.

The Uniform ABC Act, in contrast, offers a comprehensive codification for states that either lack a developed ABC statute or wish to re‑platform their existing law on a modern, nationally recognized foundation. For jurisdictions with active ABC practices like Florida, the act operates as both a benchmark and a potential roadmap—something to borrow from selectively or adopt more fully if policymakers decide that greater interstate uniformity would benefit their business and creditor communities.

To learn more about ABCs, read my earlier articles titled, What is an assignment for the benefit of creditors? and Common Features of Chapter 7 Cases and Assignments for the Benefit of Creditors.

At Moritt Hock & Hamroff LLP, our Creditors’ Rights, Restructuring & Bankruptcy team is adept at representing assignors, assignees, and creditors in ABC proceedings.