6-1-2 - When assignment void.
6-1-2. When assignment void.
An assignment for the benefit of creditors is void against any creditor of the assignor notassenting thereto in the following cases:
(1) if it gives a preference dependent upon any condition or contingency, or with anypower of revocation reserved;
(2) if it tends to coerce any creditor to release or compromise his demand;
(3) if it provides for the payment of any claim known by the assignor to be false orfraudulent, or for the payment of more upon any claim than is known to be justly due from theassignor;
(4) if it reserves any interest in the assigned property or in any part thereof to the assignoror for his benefit before all his existing debts are paid; and
(5) if it confers upon the assignee any power which, if exercised, might prevent or delaythe immediate conversion of the assigned property to the purposes of the trust; provided, that theassignment may provide reasonable terms and manner of sale to be carried out only so far aspracticable and not prejudicial to the interest of the estate in the discretion of the court.
No Change Since 1953