AI-assisted research summary: An assignee has broad powers to carry out its duties, including listed business, litigation, recovery, and transfer-avoidance powers, but must act consistently with its fiduciary duty.
(a) An assignee has the powers necessary or appropriate to perform the assignee’s duties. (b) Unless the assignment agreement expressly provides otherwise, the assignee has power to: (1) 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; (2) Incur secured or unsecured debt and pay expenses incidental to the exercise of the power under subdivision (1); (3) Assert a right, claim, cause of action, or defense the assignor could have asserted which relates to the assignment estate; (4) 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 the professional a reasonable fee for services from the assignment estate; (5) Collect on or sell, lease, license, or otherwise dispose of an asset of the assignment estate whether or not subject to a lien or other encumbrance; (6) Exercise a right to redeem an asset of the assignment estate which is subject to a mortgage, deed of trust, security interest, or other encumbrance; (7) Settle a matter involving a debtor of the assignor; (8) 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 an assignment had not been made; (9) Recover an asset in the manner and with the same effect as the assignor might or could have done if an assignment had not been made; (10) Settle claims against the assignment estate; (11) Abandon an assigned asset; (12) Subject to subsections (c) and (e), avoid a transfer or the incurrence of an obligation a creditor that has filed a proof of claim could have avoided under other law if the assignment had not occurred; and (13) Invest funds, subject to applicable prudent investor standards under other law. (c) The power under subdivision (b)(12) 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. (d) For the purpose of exercising the assignee’s power under subdivision (b)(12), 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: (1) A lien creditor under Section 7-9A-102(a)(52)(B) as to an asset that is a legal or equitable interest in personal property or fixtures; (2) A bona fide purchaser under Section 35-4-90 as to an asset that is a legal or equitable interest in non-fixture real property located in this state; and (3) A bona fide purchaser under the law of another state as to an asset that is a legal or equitable interest in non-fixture real property located in the other state. (e) An assignee’s power under subdivision (b)(12) 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 Bankruptcy Code, 11 U.S.C. § 101 et seq. (f) An assignee shall exercise the powers under this section consistent with the assignee’s fiduciary duty under Section 7-9A-909(a).