Colorado Enacts Uniform Assignment for Benefit of Creditors Act

CO Legislature Bill Search

Published January 1st, 2026

Detected February 27th, 2026

Summary

Colorado has enacted the Uniform Assignment for Benefit of Creditors Act, establishing a new framework for the transfer of assets by an assignor to an assignee for the benefit of creditors. The act outlines specific duties for assignors and assignees, including fiduciary responsibilities for the assignee and notification requirements for creditors.

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What changed

Colorado SB26-079 enacts the Uniform Assignment for Benefit of Creditors Act, creating a statutory process for assigning all of a person's assets to an assignee for the benefit of creditors. The act prohibits certain individuals, such as creditors or insiders, from serving as assignees and mandates specific duties for assignors (e.g., preserving assets, providing information) and assignees (e.g., fiduciary duty, maximizing distributions, notifying creditors, providing financial summaries every six months). The assignee is authorized to operate the assignor's business, incur debt, settle claims, and avoid certain transfers, with personal liability for breach of fiduciary duty.

Businesses operating in Colorado, particularly those facing financial distress, should familiarize themselves with this new act. Key actions include understanding the eligibility requirements for assignees, the detailed duties and responsibilities of both assignors and assignees, and the priority of distributions. While no specific compliance deadline is mentioned beyond the act's effective date, entities considering or involved in such assignments must adhere to the new statutory requirements to ensure proper administration and avoid potential personal liability for assignees.

What to do next

Review the Uniform Assignment for Benefit of Creditors Act (SB26-079) for applicability to business operations.
Update internal policies and procedures related to insolvency and creditor arrangements.
Train relevant personnel on the duties and responsibilities outlined in the Act.

Penalties

An assignee is personally liable for a breach of fiduciary duty.

Source document (simplified)

SB26-079

Uniform Assignment for Benefit of Creditors Act

| Type | Bill |
| --- | --- |
| Session | 2026 Regular Session |
| Subjects | Business & Economic Development Probate, Trusts, & Fiduciaries |
Concerning the "Uniform Assignment for Benefit of Creditors Act".

Recent Bill (PDF) Recent Fiscal Note (PDF) Bill Summary:

Colorado Commission on Uniform State Laws. The bill enacts the "Uniform Assignment for Benefit of Creditors Act". An assignment is a transfer by a person (assignor) of all of the person's assets to another person (assignee) for the benefit of the assignor's creditors (assignment).

The bill prohibits certain persons from serving as an assignee, including creditors, affiliates, or insiders of the assignor, and creates requirements for an assignment agreement.

The bill establishes specific duties for the parties to an assignment, including:

The assignor must preserve and turn over assets, provide information necessary to administer the assignment estate, and verify a list of all known creditors and assets under penalty of perjury;
The assignee has a fiduciary duty to the assignment estate and must manage the assignment estate in good faith to maximize distributions and wind up the assignment in a timely manner; and
The assignee shall notify known creditors of the assignment, maintain a separate deposit account for money, collect on or dispose of assets, and provide financial summaries to creditors at least every 6 months. The assignee is authorized to perform specific acts in furtherance of the assignee's duties, including operating the assignor's business, incurring debt, settling claims, and avoiding certain transfers that a creditor could have avoided under other law. The assignee may allow or dispute a creditor's claim against the assignment estate as specified in the bill.

The priority of distributions from the assignment estate is specified in the bill. The assignor and assignee are not personally liable for each other's acts. However, an assignee is personally liable for a breach of fiduciary duty. A court may remove an assignee for cause or if removal best serves the interests of the creditors. The assignee is discharged from the assignee's duties upon sending a final accounting and distributing all assets.

(Note: This summary applies to this bill as introduced.)