O.C.G.A. § 18-2-41 (2019)

Annotations

JUDICIAL DECISIONS Comparison of corporate rights to those of individual. - Corporation has an equal right with an individual allowing preference, but clearly under the law a

corporation “shall not be allowed to prefer any creditor or class of creditors, except such as have debts entitled to priority by the laws of this State.” Milledgeville

Banking Co. v. McIntyre Alliance Store, 98 Ga. 503, 25 S.E. 567, 1896 Ga. LEXIS 82 (1896). Assignments with or without preferences. - Insolvent corporation is capable of making a general assignment for benefit of creditors, either with or without giving preference and priority of payment to certain of the creditors. Albany & Renssellaer Iron & Steel Co. v. Southern Agric. Works, 76 Ga. 135, 1886 Ga. LEXIS 2 (1886). Preference of creditor even though incidental benefit accrues to directors. - Right of debtor corporation to prefer a creditor, and right of creditor to be preferred, cannot be lost simply because, as a mere incident to the transaction by which preference is effected, the

directors may themselves gain some benefit. Milledgeville Banking Co. v. McIntyre Alliance Store, 98 Ga. 503, 25 S.E. 567, 1896 Ga. LEXIS 82 (1896); Atlas Tack Co. v. Macon Hdwe. Co., 101 Ga. 391, 29 S.E. 27, 1897 Ga. LEXIS 240 (1897). Sole owner of insolvent corporation preferring self as creditor. - Sole owner and president of defendant corporation may not, after corporation becomes insolvent, seize all the corporation’s remaining assets and apply those assets to the debt owed by the corporation to the owner personally, thereby rendering the corporation incapable of paying its other business debts. Fountain v. Burke, 160 Ga. App. 262, 287 S.E.2d 39, 1981 Ga. App. LEXIS 2968 (1981).

RESEARCH REFERENCES Am. Jur. 2d. 6 Am. Jur. 2d, Assignments for Benefit of Creditors, § 10. ALR. Right of resident creditors of foreign corporation to preference over nonresident creditors, 1 A.L.R. 648. Right of creditor of corporation to maintain action or suit for his own benefit against another creditor to whom corporation has given a preference, 12 A.L.R. 246. Right of corporation to prefer creditors, 19 A.L.R. 320; 38 A.L.R. 90; 48 A.L.R. 479; 56 A.L.R. 207; 62 A.L.R. 738. Waiver of right of government to preference in the assets of insolvent debtor by taking security, 24 A.L.R. 1495; 83 A.L.R. 1119.

Priority as between different assignees of same chose in action as affected by notice to debtor, 31 A.L.R. 876; 110 A.L.R. 774. Power of municipality to transfer or assign its right to enforce assessment or lien for local improvements, 55 A.L.R. 667. Payment of depositor’s check after insolvency of bank as an unlawful preference, 74 A.L.R. 937. Debtor’s return of merchandise to selling creditor for credit as preferential transfer voidable in bankruptcy proceedings, 62 A.L.R.2d 774. Validity of provision in deed or transfer to assignee for benefit of creditors for payment of attorneys’ fees, 79 A.L.R.2d 513.