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Title 27 - Property and Conveyances
ASSIGNMENTS FOR THE BENEFIT OF CREDITORS
Assignment by insolvent debtor.
Any assignment by an insolvent debtor of his property for the benefit of his creditors in which any preference or priority is given to any creditor or creditors of the debtor by the terms of the assignment over any other creditor or creditors, other than as to any debts due to the public, or in which any provision or disposition of the property so assigned is made or directed other than that it be distributed among all creditors of the insolvent debtor equally, in proportion to the amount of their several demands and without preference or priority of any kind whatsoever, save only as to debts due to the public and save only as to such creditors as may accept the terms of such assignment and execute a release of their claim against the debtor, and except as hereinafter provided, shall be absolutely null and void and of no effect whatsoever.
Preferential transactions within ninety days of assignment.
If any person, being insolvent, within ninety days before the making of any assignment by him of his property for the benefit of his creditors, with a view of giving a preference to any creditor or person having a claim against him or who is under any liability for him, procures or suffers any part of his property to be attached, sequestered or seized on execution or makes any payment, pledge, assignment, transfer or conveyance of any part of his property, either directly or indirectly, absolutely or conditionally, the person receiving such payment, pledge, assignment, transfer or conveyance of any part of his property, or to be benefited thereby or by such attachment, having reasonable cause to believe such person to be insolvent and that such attachment, sequestration, seizure, payment, pledge, assignment or conveyance is made in fraud of the provisions of this chapter, such attachment, sequestration, seizure, payment, pledge, assignment, transfer or conveyance so procured, suffered or made by such insolvent person shall be void and the assignee may recover the property, or the value of it, from the person so receiving it or so to be benefited. Nothing, however, in this section shall be construed to invalidate any loan of actual value, or the security therefor, made in good faith, upon a security taken in good faith, on the occasion of the making of such loan, or any security bona fide made for advances.
Assignment for benefit of creditors; attack by creditor.
Whenever any debtor shall assign his property for the benefit of his creditors, any creditor of such debtor, either by simple contract, specialty or in any other manner, may institute proceedings against the debtor, or the assignee named in the assignment, or both, or any other person properly party thereto, either to attack and set aside the deed of assignment or to enforce the provisions thereof, or for any other purpose whatever, without first obtaining and entering up judgment against the debtor upon the claim or demand so held by the creditor.
Assignment for benefit of creditors; appointment of agents by creditors.
Whenever any debtor shall assign his property for the benefit of his creditors, the creditors may name and appoint an agent or agents, equal in number to the assignees, to act in their behalf jointly with the assignee or assignees named and appointed by the assignor.
Sales and transfers prior to appointment of agents.
Except as otherwise provided, all sales and transfers of property made by the assignee or assignees prior to the appointment of the agent or agents of the creditors are hereby declared void and of no effect.
Calling creditors together.
The assignee or assignees, within ten days after the execution of the deed of assignment, shall call the creditors together to proceed to the appointment of their agent or agents.
Procedure when assignees neglect or refuse to call creditors together.
If the assignee or assignees delay, neglect or refuse to assemble the creditors within the time herein prescribed and limited, the creditors may meet and appoint their agent or agents; and the agent or agents, on application to and by order of the judge of the court of common pleas, shall take into their hands and possession all the property assigned and of which the assignee would by law be entitled to the possession and shall sell and dispose of it agreeably to the deed of assignment.
Election of agents.
In the appointment of the agent or agents, the majority in amount of the debts represented by the creditors present at the meeting shall govern.
Rights and powers of agents.
The agent or agents so appointed shall have equal power and authority with the assignee or assignees to sell and dispose of the property assigned and distribute and pay the proceeds, according to the intent and provisions of the deed of assignment. All sales, hypothecations or other transfers of property, whether real or personal, shall be void and null unless made with the consent and concurrence of the assignee or assignees and agent or agents, or a majority of them, and should the assignee or assignees and agent or agents be equally divided on any question such question shall be decided by an umpire appointed as provided in Section 27-25-110.
Effect of neglect or refusal of creditors to appoint agents.
Should the creditors refuse or neglect to appoint an agent or agents within ten days after they have been called together by the assignee or assignees, the assignee or assignees may forthwith proceed to sell or otherwise dispose of the assigned effects, without the concurrence of the creditors.
Appointment of umpire.
In case of disagreement between the assignee or assignees and agent or agents, any of the judges of the courts of common pleas, at chambers, shall, on application of either of the parties, decide and, if deemed necessary, name and appoint an umpire to act jointly with the assignee or assignees and agent or agents.
Deposit of proceeds of sales.
The proceeds arising from the sales of the property assigned shall be deposited for safekeeping in a national bank within the State or some banking institution incorporated by the State, in the joint names of the assignee or assignees and agent or agents and subject to their joint drafts.
General powers of creditors.
The creditors or such committee as they may appoint may direct and prescribe the time and mode of selling and the terms of sale or order a distribution of the assets on hand, and a final closing of the concern. And, in case of need, they may revoke and dismiss their agent or agents and name and appoint another or others in their stead.
Statements of proceedings.
The assignee or assignees and agent or agents shall lay, every three months, before the creditors or such committee as they may appoint, an exact statement of their proceedings. The creditors or their committee may, however, call the assignee or assignees and agent or agents oftener to account.
Damages for failure to account or follow directions.
The assignee's or assignees' and agent's or agents' failure or neglect to lay a statement of their proceedings before the creditors or their committee, as and when directed by Section 27-25-140, or whenever called on, or to obey or abide by their directions, renders them answerable for all damages resulting from their refusal or neglect, and they shall forfeit the commission they might otherwise be entitled to.
The commission due and owing to the assignee or assignees and agent or agents for their trouble and labor shall be five per cent on receiving and two and a half per cent on paying, to be equally divided between them, that is to say, one half to the assignee or assignees and the other half to the agent or agents. But upon petition to the circuit court or a judge thereof there may, in the discretion of the court or judge, be allowed fees to the assignee or assignees and agent or agents in excess of those above provided.