Assignment for the benefit of creditors and your company data
The short answer
An assignment for the benefit of creditors (ABC) is a state-law wind-down: the company hands all its assets, data included, to an independent assignee who turns them into money for creditors. No consumer privacy ombudsman is appointed. That role exists only in a bankruptcy sale under 11 U.S.C. 363(b)(1).
Bankruptcy gets the headlines. Plenty of insolvent companies close through a quieter state process instead, and the records leave with the desks and the laptops.
How does an assignment for the benefit of creditors work?
A company signs an assignment that hands all its assets to an assignee. The assignee owes duties to the creditors, turns the assets into money and pays the claims in the order state law sets.
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Delaware. The assignee can't be a creditor, an insider or an affiliate of either, under 10 Del. C. 7304A.
The assignee files a petition with the Court of Chancery within 14 days and notifies creditors, recent employees and contract counterparties within 30 days. The claims deadline is at least 90 days out.
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Florida. Under chapter 727 of the Florida Statutes, the assignee records the assignment and files a petition in circuit court within 10 days. The court supervises from there.
Notice runs in a local newspaper once a week for 4 weeks, and known creditors get it by mail within 20 days of the petition.
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California. Code of Civil Procedure section 493.010 defines a general assignment.
It must cover all the assignor's transferable assets that are not exempt, be for the benefit of all creditors, and create no new preference among them.
What changed in Delaware's assignment for the benefit of creditors law in 2026?
Delaware replaced its old voluntary assignment sections, 10 Del. C. 7381 to 7387, with the Uniform Assignment for Benefit of Creditors Act. The act was approved on 10 Jun 2026 as 85 Del. Laws chapter 291 and now sits in chapter 73A of title 10.
The old sections, 7381 to 7387, still govern any assignment made before the act took effect.
The new chapter sets out an independent assignee, a signed agreement that describes the assets and the fees, creditor notices on a deadline and a final accounting to creditors.
How is an assignment for the benefit of creditors different from a 363 sale?
A 363 sale happens inside a bankruptcy case. Under 11 U.S.C. 363(b)(1), the trustee may sell estate property outside the ordinary course only after notice and a hearing. An assignment for the benefit of creditors runs under state law, with an assignee the company picks.
| Assignment for the benefit of creditors | 363 sale | |
|---|---|---|
| Law | A state statute, such as Delaware chapter 73A or Florida chapter 727 | The federal Bankruptcy Code |
| Who sells | The assignee | The trustee, after notice and a hearing |
| Court | Delaware: a Court of Chancery petition within 14 days. Florida: circuit court supervision | The bankruptcy court |
| Privacy ombudsman | None in the Delaware or Florida statutes | Possible under section 332, when the privacy policy barred the transfer |
Is a consumer privacy ombudsman involved in an assignment for the benefit of creditors?
No. The ombudsman comes from 11 U.S.C. 332 and is appointed only when a bankruptcy sale of personally identifiable information needs court approval under section 363(b)(1)(B). The Delaware and Florida assignment statutes appoint no one in that role.
That doesn't free the data from rules. Your privacy policy, your customer contracts and state privacy law still travel with the records.
The bankruptcy side is on our pages about the consumer privacy ombudsman and customer data in bankruptcy.
What happens to company data in an assignment for the benefit of creditors?
Company data is an asset like any other, so it goes to the assignee with everything else. Florida's statutory assignment form transfers "all books, records, and electronic data pertaining to all such assets," wherever they are.
Delaware's act gives the assignee the power to sell, lease or license an asset. A chat archive or a customer database can be licensed out of the estate the same way a patent can.
There is one carve-out. Delaware's definition of an asset leaves out property whose assignment another law restricts, unless that law allows it with consent and the consent is given. The company has to help the assignee get it.
What should owners do with company data before an assignment for the benefit of creditors?
Map the data before you sign. Once the assignment is signed, Delaware's act makes the company preserve and turn over the assets it controls, with a list of every asset, employee and known creditor, so deletion decisions belong before that point.
Know which records you must keep anyway. Our page on what to keep, delete or license when you close has the federal periods.
The rights check asks about the contracts and consents an assignee will need. A clean export and a clear rights picture give the assignee something it can license instead of something it has to dig for.
If the company is solvent and simply done, a plain dissolution is the usual route. Our page on closing a business and walking away compares that with leaving it unfiled.
Vaultfish helps you run the process. We are not lawyers and this is not legal advice. If you need counsel who knows this area, we can point you to one. Ask for a referral
