assignment for benefit of creditors

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Assignment for the benefit of the creditors (ABC)(also known as general assignment for the benefit of the creditors) is a voluntary alternative to formal bankruptcy proceedings that transfers all of the assets from a debtor to a trust for liquidating and distributing its assets. The trustee will manage the assets to pay off debt to creditors, and if any assets are left over, they will be transferred back to the debtor. 

ABC can provide many benefits to an insolvent business in lieu of bankruptcy . First, unlike in bankruptcy proceedings, the business can choose the trustee overseeing the process who might know the specifics of the business better than an appointed trustee. Second, bankruptcy proceedings can take much more time, involve more steps, and further restrict how the business is liquidated compared to an ABC which avoids judicial oversight. Thirdly, dissolving or transferring a company through an ABC often avoids the negative publicity that bankruptcy generates. Lastly, a company trying to purchase assets of a struggling company can avoid liability to unsecured creditors of the failing company. This is important because most other options would expose the acquiring business to all the debt of the struggling business. 

ABC has risen in popularity since the early 2000s, but it varies based on the state. California embraces ABC with common law oversight while many states use stricter statutory ABC structures such as Florida. Also, depending on the state’s corporate law and the company’s charter , the struggling business may be forced to get shareholder approval to use ABC which can be difficult in large corporations. 

[Last updated in June of 2021 by the Wex Definitions Team ]

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Assignments for the Benefits of Creditors - "ABC's" - The Basics in California

An assignment for the benefit of creditors (“ABC”) is a contract by which an economically troubled entity ("Assignor") transfers legal and equitable title, as well as custody and control, of its assets and property to an independent third party ("Assignee") in trust, who is required to apply the proceeds of sale of the property to the assignor's creditors in accord with priorities established by law.

ABCs are a well-established common law tool and alternative to formal bankruptcy proceedings. The method only makes sense if there are significant assets to liquidate. ABCs are most successful when the Assignor, Assignee and creditors cooperate but can be imposed even if the creditors are not supportive.

Assignors - Rights and Duties

Generally, any debtor – an individual, partnership, corporation or LLC - may make an assignment for the benefit of creditors. Individuals seldom utilize ABCs, though, because there is no discharge of all debts as there would normally occur in a completed bankruptcy filing. Thus, the protection and benefit of the process is quite limited for any personal obligor.

ABCs can benefit individual principals who have personally guaranteed company obligations or have personal liability on tax claims. Once the Assignment Agreement has been executed, a trust is automatically put in place over the assets transferred. The Assignor can neither rescind the contract nor control the proceedings, but the Assignor may be consulted as necessary and appropriate by the Assignee during the liquidation process.

Assets to be Assigned

Assignor may assign any non-exempt real, personal, and/or general intangible property that can be sold or conveyed. Note that such assets as intellectual property, trade names, logos, etc. may be so transferred and sold. When a corporation makes an assignment, all corporate property, tangible and intangible is transferred including accounts, and rights and credits of all kinds, both in law and equity. The assets only can be sold, not the corporation or its stock. Thus the corporation remains existing, albeit without any significant assets left. It becomes, effectively, a shell.

Assets are typically sold without representations or warranties. The sale is free and clear of known liens, claims and encumbrances - with the consent or full payoff of lien holders. Generally, Assignee warrants only that Assignee has title to the assets.

Assignees - Rights and Duties

The Assignee is generally an unrelated professional liquidator selected by the Assignor. The Assignee gathers the Assignor’s assets and sells the Assignor’s right, title and interest in those assets, then distributes the proceeds to Creditors in accordance with statutory priorities.

The Assignee has a fiduciary duty to the Creditors. Assignee’s duties include protecting the assets of the estate, administering them fairly and representing the estate. Assignee is free to enter into contracts to recover assets or liquidated claims, e.g. filing suit or taking other action.

The Assignee may be removed by a court for violations of the Assignment contract or nonfeasance (failure to act appropriately). The Assignee may not give up his/her/its duties without liability or a superior court order until creditors receive distribution of the proceeds of sale of the assets transferred.

Assignee usually prepares the Assignment documents, though the attorney for the Assignor may draft them as well. Often the terms are negotiated at length.

Preferential Claims and Avoidance

Assignee has statutory avoidance powers, similar to those granted to a Chapter 7 bankruptcy trustee. [See Calif. CCP § 493.030 (termination of lien of attachment or temporary protective order), § 1800 et seq. (avoidance of preferential transfers); Calif. Civ.C. § 3439 et seq. (avoidance of fraudulent conveyances)]

Even so, courts may question this right outside a bankruptcy proceeding. There is also disagreement between the Federal Court (Ninth Circuit) and California state courts whether the Bankruptcy Code preempts the assignee's preference avoidance power under California statutory law.

Creditors - Rights and Duties

While not required to consent to an Assignment, secured creditors often must agree in advance since their cooperation frequently affects the liquidation of the assets. Secured creditors are not barred from enforcing their security by such an assignment. The acceptance of an Assignment by unsecured creditors is not necessary, since under common law the proceedings are deemed to benefit them through equality of treatment.

Note that all Creditors must file their claims within the statutory 150-180 day claim filing period.

ABCs in California do not require a public court filing, but most corporations require both board and shareholder approval. Costs and expenses, including the assignee’s fees, legal expenses and costs of administration, are paid first, just as in a Chapter 7 bankruptcy . Because an assignee’s fee is often based on a percentage value of the assigned assets, it can be difficult to procure assignees for smaller estates.

  • Assignment Agreement is executed and ratified. Assignor turns over and assigns to Assignee all right, title and interest in the assets being assigned.
  • Assignor gives Assignee a complete, certified list of creditors, including addresses and amounts owed.
  • Assignee notifies Creditors within 30 days of execution that assignment has been made, provides an estimate of the probable distribution, and provides a claim form for each Creditor to file a claim in the Assignment estate.
  • Creditors have 150-180 days from the date of written notice of the assignment to file their claims.
  • After claim forms are returned and/or the Bar Date has passed, Assignee reconciles the claims and/or objects to any improper claim amounts.
  • After liquidation, Assignee determines distribution amounts. Claim priority is determined first by state statute, then by Bankruptcy Code. First are secured creditors, then follow tax & wage claims.
  • Assignee generally informs the IRS that assignment has been made and files notice with local Recorder.
  • Assignee immediately searches for any previously undisclosed liens (UCC or real estate) to ensure complete notice to all creditors and interest holders.
  • Assignee secures all assets. In limited situations where the business has enough cash, Assignee may continue to operate the business to maintain going-concern value - if no further debt will be incurred.

It normally takes about 12 months to conclude an ABC.

Effects of ABC

An ABC generally is faster and less costly than a bankruptcy proceeding. Parties can often agree and determine what is going to happen prior to execution of the assignment.

However, ABCs do not discharge individual Assignors from their debts, and do not provide for the reorganization of the business. There is no automatic stay, though in practice an ABC results in an informal and/or incomplete automatic stay if the creditors determine that the assets are beyond their reach.

Creditors are able to continue to pursue the Assignor. ABCs often block judgment creditors from attaching assets because the Assignor no longer has title to or interest in the assigned assets. Sometimes the Assignee is willing to allow the judgment if the judgment creditor submits its claim as described above. The assignee may also defend against a claim if the plaintiff is seeking a judgment which is unjustified and not fair to other creditors.

An ABC also provides grounds for filing an involuntary bankruptcy petition within 120 days of assignment.

The Statutes: California Code of Civil Procedure

§§493.010-493.060 “Effect of Bankruptcy Proceedings and General Assignments for the Benefit of Creditors”

§§1800-1802 “Recovery of Preferences and Exempt Property in an Assignment for the Benefit of Creditors”

A Chapter 11 Reorganization can cost hundreds of thousands of dollars and even a business Chapter 7 Liquidation bankruptcy can easily cost tens of thousands or more. The Assignment method, which pays the Assignee normally by a percentage of the assets sold, is cost-efficient but limited in the protection it may afford the Assignor, as described above. Before this method is attempted, competent legal counsel and certified public accountants should be consulted.

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United States: Assignment For The Benefit Of Creditors: An Overview

View Kyriaki  Christodoulou Biography on their website

What is an assignment for the benefit of creditors? An assignment for the benefit of creditors ("ABC") is an alternative to a chapter 7 bankruptcy proceeding. As in a chapter 7, the debtor's assets are shepherded and liquidated for the benefit of the debtor's creditors. An ABC is governed by statute and can either be court-supervised or conducted out of court. In New York, an ABC is governed by Article 2 of the Debtor and Creditor Law.

In an ABC proceeding, the debtor is referred to as an assignor, because it makes a transfer of all its assets to an assignee who serves as a trustee. The assignee is charged with placing all the assets in trust in order to liquidate and distribute the proceeds to creditors. While an ABC has many similarities with a chapter 7 liquidation, the two do differ in two important regards:

  • an ABC does not afford a debtor an automatic stay from creditor collection; and
  • a sale does not provide the purchaser with the right to purchase the assets free and clear of liens – unlike a 363 sale in Bankruptcy.

To commence an ABC, an assignor executes an assignment conveying all its assets to the assignee, who becomes a fiduciary on behalf of the assignor and its creditors. The assignee then collects and liquidates assets by collecting accounts receivable, conducting an auction sale, sometimes to a stalking horse bidder who starts the bidding, or through a going out of business sale.

An assignor also has powers under state law to recover fraudulent pre-ABC transfers of assets and preferential payments made to creditors. In New York, the "look-back period" for recovering these transfers is four years.

When it comes to distribution of the assets collected by the assignee, an ABC proceeding follows an established order of priority, which is set forth in either the state's unique ABC laws or in the deed of assignment. The assignee tallies the proofs of claim that were filed by the creditors in the proceeding and pays the claims, either in full or on a pro rata basis in accordance with the priority scheme.

After the assignor's assets have been liquidated and creditors have been paid out, the assignee must prepare an accounting detailing the flows of monies in and out of the estate during the case, which may have to be filed with the court supervising the proceedings. As part of the accounting process, the assignee asks the court to close the estate, which notifies all interested parties that (i) the estate has been fully administered, (ii) that the assignee's work is complete, (iii) that no further distributions need be made, and (iv) that the assignment is terminated.

An ABC is a useful, cost-effective alternative to a traditional chapter 7 bankruptcy liquidation, and may suitably serve liquidation requirements in some situations.

Originally published 03/07/2023

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Insolvency Law Committee Updates Assignment for Benefit of Creditors Desk Guide

Assignment for the Benefit of Creditors Desk Guide image

Six years after publishing the popular First Edition of the Assignment for the Benefit of Creditors Desk Guide, the Insolvency Law Committee of the Business Law Section has updated and enhanced the Guide for continued use by assignors, assignees, creditors, landlords, purchasers of assets, owners, accountants, real and personal property brokers and other related professionals.

The Second Edition captures in an indispensable single volume (electronic with a paper version on its way) updated relevant California and Federal statutes, case law precedents, a bibliography of source materials, an enhanced tax section and commentary on current legal developments regarding preference avoidance and federal preemption issues that sometimes occur during a California Assignment for the Benefit of Creditors.

The Assignment for the Benefit of Creditors Desk Guide, Second Edition is available here for $ 95.00.

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Is an Assignment for the Benefit of Creditors like a Bankruptcy?

Is an Assignment for the Benefit of Creditors like a Bankruptcy?

At first, an assignment for the benefit of creditors (ABC) may seem similar to a bankruptcy claim. However, upon a deeper look, it is clear that an assignment for the benefit of creditors is different. Similar to liquidation proceedings in chapter 7 or chapter 11 bankruptcy proceedings, an ABC can be used by either an individual or a business if they are going through significant financial difficulties. In both cases, the struggling debtor sells off all its assets in order to pay back its outstanding debts to its creditors. This mechanism helps to maximize the return for creditors.

An assignment for the benefit of creditors is distinct from bankruptcy proceedings because it is a much less formal process governed by state law rather than federal law. The informal nature of these proceedings means that it is faster and easier to marshal a debtor’s assets, liquidate same, and distribute proceeds equitably to creditors under an assignment rather than under federal bankruptcy law. Furthermore, an ABC often requires less court involvement and provides more flexibility to the assignee to make liquidation decisions as required. This is generally beneficial for both creditors and debtors because it is faster, less expensive, and more private than traditionally afforded bankruptcy liquidations.

Understanding Assignment for the Benefit of Creditors in New Jersey

In New Jersey, an assignment for the benefit of creditors is governed by New Jersey statutes that codify the preexisting common law. The proceedings are voluntary processes whereby the debtor designates an assignee who is empowered to marshal and liquidate (sell) the assets of the debtor and then distribute the proceeds of the sale to the debtor’s creditors. The assignee must ensure that all of the financial liquidations are done for the benefit of the creditors and with the sole goal of repaying outstanding debts. This is significant because in New Jersey, the debtor can choose its assignee rather than relying on a court-appointed trustee in bankruptcy who may not understand the nuances of the debtor’s finances. The ability to choose the assignee can be beneficial because an assignee with an understanding of the debtor’s finances can expedite the liquidation process rather than spend valuable time learning the ropes.

An ABC in New Jersey is generally cheaper than filing formal bankruptcy proceedings because it is faster and usually requires less litigation. The expeditious nature cuts down on the debtor’s and creditor’s legal bills and other costs associated with ongoing litigation. Still, creditors should be counseled to make sure that the liquidation is being conducted properly, and that the assignee is obtaining a fair return on the sale of the assets to maximize the recovery of the debts owed to the creditors.

FSKS is on Your Side

At FSKS, our attorneys are experienced in both bankruptcy and assignments for the benefit of creditors in New Jersey. We have a strong track record of success in the area of creditor’s rights and pride ourselves on being one of the strongest and most successful Creditors’ Rights firms in New Jersey, New York, and Pennsylvania. We’re ready to give you trusted advice and help maximize your return.

If you require assistance with or have questions regarding an assignment for the benefit of creditors in New Jersey, please contact Vincent DiMaiolo, Jr. ( [email protected] ), Nicholas Canova ( [email protected] ), or Tammy L. Terrell-Benoza ( [email protected] ) at (973) 538-4700 .

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  • Assignment for the Benefit of Creditors

Helping Florida business owners exit gracefully and move on with less time and hassle than bankruptcy

An assignment for the benefit of creditors (ABC) is one way for an insolvent company to wind down its operations in an orderly fashion. Like a Chapter 7 business bankruptcy, an ABC involves selling the company’s assets and using the proceeds to pay off creditors, but without the stigma of a bankruptcy on their credit report or the mind of the public.

The business attorneys at Edelboim Lieberman have successfully helped many South Florida companies with an assignment for the benefit of creditors. Learn more about ABCs below, and call Edelboim Lieberman in Miami or Fort Lauderdale to find out if an ABC is right for you.

How does an ABC work?

The owner of the company (the assignor) makes an assignment, or transfer, of company assets and debts to another company or law firm (the assignee). The assignee is then responsible to sell the assets and use the proceeds to pay off the creditors. By using an ABC, the assignor gets to move on quickly from the insolvent company without having to personally go through the process of liquidating assets and paying creditors or going through the Chapter 7 bankruptcy process.

ABCs Under Florida Law

Unlike a Chapter 7 bankruptcy, which takes place in federal bankruptcy court and is supervised by a federal bankruptcy trustee, ABCs are filed in and supervised by the Florida state courts. Florida Statutes Chapter 727 governs an assignment for the benefit of creditors.

Following are some important points about the way ABCs operate in Florida:

  • ABCs must be in writing. Florida statutes provide a sample form of assignment; the ABC should be in substantially the same form.
  • An ABC represents an irrevocable assignment.
  • The assignee files the assignment with the court, publishes a notice of the assignment as required by law and also notifies creditors of the assignment.
  • In certain situations, the assignee can carry on the business for a period to maximize return.
  • The assignee can reject an unexpired lease.
  • The assignee can hire professionals as needed, such as accountants, appraisers, auctioneers, and attorneys, to assist in the liquidation of assets.
  • The assignee can examine the validity and priority of claims and litigate disputed claims.
  • The assignee can sue to enforce claims the assignee may have by virtue of the assignment or assign a cause of action to another party.
  • The assignee must file interim and final reports with the court.
  • Any monies left over after creditors are paid goes back to the assignor.

Is an ABC better than bankruptcy?

An ABC liquidates assets and winds down business operations similar to a Chapter 7 bankruptcy, and an ABC is conducted under court supervision like Chapter 7. However, an ABC can offer advantages over Chapter 7 in many instances. Importantly, an assignee typically gets a greater return when selling assets since the assignee is frequently knowledgeable about the industry and is often a skilled and experienced negotiator. Additionally, an assignee can continue to run the business as a going concern for a while and even sell it as such, which a bankruptcy trustee won’t do.

ABCs also offer more privacy to the assignor, as opposed to going through the public court filings of a bankruptcy. And the ABC is faster for the assignor. The assignor makes the assignment and is done, rather than going through bankruptcy which can take months or years depending on the assets to be liquidated.

On the other hand, an assignor does not get the benefit of the automatic stay afforded by bankruptcy, which might encourage a company to file for bankruptcy instead. Yet one could argue there is no reason a creditor would go after an assignor after the ABC has been executed, knowing the assignor no longer has assets. Generally speaking, ABCs are usually a less litigious process than Chapter 7 for businesses.

Is an ABC right for me?

If you have racked up a large amount of debt with a lot of different creditors and you see that your business is not going to make it, an assignment for the benefit of creditors might be the smart move. Especially if you have a large number of assets, liquidating the business to pay off your creditors can take months or even years. An ABC lets you transfer all your assets and debts at once, allowing you to move on immediately while the assignee takes on the burden of handling the liquidation and paying off creditors.

Since there are pros and cons to both Chapter 7 bankruptcy and ABCs, and there may be other unexplored alternatives as well, the best thing to do is sit down with an experienced business bankruptcy attorney to analyze your situation and look at all your options, so you can choose the best path forward that makes sense for you.

Get Help Today With an Assignment for the Benefit of Creditors in Miami and South Florida

For help with an Assignment for the Benefit of Creditors or other aspects of business bankruptcy in South Florida, contact Edelboim Lieberman at their offices in Miami and Fort Lauderdale by calling 305-768-9909 for a no-cost, confidential consultation.

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2005 California Code of Civil Procedure Sections 493.010-493.060 ASSIGNMENTS FOR THE BENEFIT OF CREDITORS

Disclaimer: These codes may not be the most recent version. California may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.

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assignment for the benefit of creditors là gì

Assignment for the Benefit of Creditors

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Our Business Restructuring, Creditors’ Rights & Bankruptcy practice group regularly advises clients in a broad range of industries nationally on issues relating to financial distress, insolvency and the exercise of associated rights and remedies. Our extensive experience and substantial knowledge of the law enables us to develop innovative business strategies and solutions for our clients’ most difficult challenges.

In connection with representations involving the sale of distressed businesses, we have advised each of the key stakeholders including buyers, sellers, sponsors, lenders, directors and officers. Our clients in distressed business transactions include public and private companies, private equity firms and financial institutions. We understand the complexities and sensitivities in these matters and recognize that each transaction has a different mix of risk, certainty, speed and expense. Our job is to understand our client’s needs, master the facts, develop an optimal strategy for accomplishing our client’s business objectives that anticipates all potential challenges and identifies solutions in advance, and efficiently execute the agreed upon strategy to successful completion.

Client feedback lauds our practice group as “five-star” for providing “a very high level of client service” and for going “above and beyond to assist the client.” We are also known for being “proactive and attentive. Always accessible. Creative and forward with advice.”

A representative sample of our completed ABC transactions include:

Health, Life Sciences & Wellness

  • Representing the assignee in the ABC for a life sciences company specializing in cancer treatment options.
  • Representing the assignee in the ABC for a provider of musculoskeletal wellness and soft tissue illness treatment and prevention solutions to employers.
  • Representing the assignee in the ABC for a manufacturer of radiation protective products for the health care, dental, veterinary and nuclear industries.

Technology & Software

  • Representing the assignee in the ABC for a developer of three-dimensional long-range facial recognition technology.
  • Representing an assignee in a motion technologies company’s ABC in the Delaware Court of Chancery.
  • Representing the assignee in the ABC for a developer of technology in the cable television industry.
  • Representing the assignee in the ABC for a developer of marker-less motion capture software and systems.

Manufacturing

  • Representing the assignee in the ABC for a developer of energy conversion systems for wind energy and industrial markets, including advising our client on liquidation of assets and distribution to creditors.
  • Representing three assignees in the ABC for the world’s largest privately held designer, manufacturer and marketer of winch systems.

Media, Entertainment & Leisure

  • Representing the senior lender in the ABC for a nationwide religious bookstore.
  • Representing the assignee in the ABC for a developer of interactive video games and digital content.
  • Representing the assignee in the ABC for a vacation rental distributor.
  • Representing the assignees in multiple ABCs involving a national trampoline park.

Consumer Products

  • Representing a special purpose entity in the ABC for an online grocery provider.
  • Representing the assignees in the ABCs for an online estate auction house.

Real Estate & Other Services

  • Representing the assignees in the ABCs for an office leasing company with 22 U.S. locations.
  • Representing a secured lender’s interest in an ABC involving a government contract-related dispute.
  • Representing the assignee in the ABC for a provider of advertising material.
  • Representing three assignees in the ABC for an SAS company.
  • Representing the assignee in the ABC for a provider of a mobile delivery network software development kit.
  • Representing the assignees in multiple ABCs for a software company based in Denver, Colorado.
  • Representing the assignee in the ABC for a software company based in Missoula, Montana.

Assignments for the Benefit of Creditors: Florida | Practical Law

assignment for the benefit of creditors là gì

Assignments for the Benefit of Creditors: Florida

Practical law state q&a w-023-1232  (approx. 21 pages).

Assignments for the Benefit of Creditors

This practice note discusses assignments for the benefit of creditors (also known as a general assignment or ABC). An assignment for the benefit of creditors involves the assignment of all of a company's assets to a third-party assignee.

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Chapter 21. Assignment for Benefit of Creditors.

assignment for the benefit of creditors là gì

IMAGES

  1. General Assignments for the Benefit of Creditors: The ABCs of ABCs (5th

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  2. General Form of Assignment to Benefit Creditors

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  3. Proof Of Claim

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  4. Fillable Online Assignment for the Benefit of Creditors of: PROOF OF

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  5. Washington General Form of Assignment to Benefit Creditors

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  6. ABCs 101 (Assignment for the Benefit of Creditors)

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COMMENTS

  1. assignment for benefit of creditors

    Assignment for the benefit of the creditors (ABC) (also known as general assignment for the benefit of the creditors) is a voluntary alternative to formal bankruptcy proceedings that transfers all of the assets from a debtor to a trust for liquidating and distributing its assets.

  2. Assignment for the Benefit of Creditors: Effective Tool for Acquiring

    An assignment for the benefit of creditors (ABC) is a business liquidation device available to an insolvent debtor as an alternative to formal bankruptcy proceedings. In many instances, an ABC can be the most advantageous and graceful exit strategy.

  3. Assignments for the Benefits of Creditors

    An assignment for the benefit of creditors ("ABC") is a contract by which an economically troubled entity ("Assignor") transfers legal and equitable title, as well as custody and control, of its assets and property to an independent third party ("Assignee") in trust, who is required to apply the proceeds of sale of the property to the assignor's...

  4. Primer on Florida's Assignment for Benefit of Creditors ...

    The assignment is a transfer of the debtor's legal and equitable title to property to the assignee, a fiduciary with authority to liquidate the debtor's affairs and distribute proceeds equitably to creditors. The assignee is typically a professional liquidator.

  5. Assignment for Benefit of Creditors: Alternative to Business ...

    The third alternative to liquidating your own business or filing for bankruptcy is to follow a procedure called an "assignment for the benefit of creditors," or ABC. An ABC, as the name would suggest, is an assignment with the purpose of liquidating assets to benefit creditors by getting them paid. Need Professional Help?

  6. Assignment for the Benefit of Creditors: An Overview

    An assignment for the benefit of creditors ("ABC") is an alternative to a chapter 7 bankruptcy proceeding. As in a chapter 7, the debtor's assets are shepherded and liquidated for the benefit of the debtor's creditors. An ABC is governed by statute and can either be court-supervised or conducted out of court.

  7. Assignment For The Benefit Of Creditors: An Overview

    An assignment for the benefit of creditors ("ABC") is an alternative to a chapter 7 bankruptcy proceeding. As in a chapter 7, the debtor's assets are shepherded and liquidated for the benefit of the debtor's creditors.

  8. ABC: Assignments for the Benefit of Creditors

    But here we are talking about a type of business liquidation process in the United States known as an Assignment for the Benefit of Creditors ("ABC"). An ABC is governed by state law and has long been viewed as an alternative to a liquidation under Chapter 7 of the US Bankruptcy Code. Although the ABC process has existed for more than a ...

  9. Assignments for the Benefit of Creditors: Overview

    Assignments for the Benefit of Creditors: Overview by Steven J. Mitnick and Marc D. Miceli, SM Law PC, with Practical Law Bankruptcy & Restructuring Maintained • USA (National/Federal) A Practice Note providing an overview of assignments for the benefit of creditors.

  10. California Code, Code of Civil Procedure

    California Code, Code of Civil Procedure - CCP § 493.010. (b) The assignment is for the benefit of all the defendant's creditors. (c) The assignment does not itself create a preference of one creditor or class of creditors over any other creditor or class of creditors, but the assignment may recognize the existence of preferences to which ...

  11. Insolvency Law Committee Updates Assignment for Benefit of Creditors

    Six years after publishing the popular First Edition of the Assignment for the Benefit of Creditors Desk Guide, the Insolvency Law Committee of the Business Law Section has updated and enhanced the Guide for continued use by assignors, assignees, creditors, landlords, purchasers of assets, owners, accountants, real and personal property brokers and other related professionals.

  12. Making Assignments For The Benefit Of Creditors As Easy As A-B-C

    resolve distress under state law" in a process called an "assignment for the benefit of creditors" (ABC).11 ABCs provide a state-law alternative to the filing of a federal bankruptcy case. Aptly named, they involve the assignment of an insolvent company's assets to a third-party assignee, who is selected

  13. Is an Assignment for the Benefit of Creditors like a Bankruptcy?

    An assignment for the benefit of creditors is distinct from bankruptcy proceedings because it is a much less formal process governed by state law rather than federal law. The informal nature of these proceedings means that it is faster and easier to marshal a debtor's assets, liquidate same, and distribute proceeds equitably to creditors ...

  14. Assignment For Benefit Of Creditors

    An assignment for the benefit of creditors (ABC) is one way for an insolvent company to wind down its operations in an orderly fashion. Like a Chapter 7 business bankruptcy, an ABC involves selling the company's assets and using the proceeds to pay off creditors, but without the stigma of a bankruptcy on their credit report or the mind of the ...

  15. PDF The ABCs of Assignments for the Benefit of Creditors (ABCs)

    Advantages In many cases, ABCs may be a superior liquidation mechanism when compared to using more cumbersome statutory procedures governing chapter 7 or chapter 11 bankruptcy.

  16. Assignment for the Benefit of Creditors: General Overview

    USA February 4 2016. If you are considering bankruptcy for your insolvent business, an Assignment for the Benefit of Creditors ("ABC") might be your answer. An ABC is a less expensive, quicker ...

  17. ABC: Assignments for the Benefit of Creditors

    A company authorizes (through board and any necessary shareholder consent) the shutdown of its operations and assignment of all of its assets to a third-party assignee for the benefit of the...

  18. ASSIGNMENTS FOR THE BENEFIT OF CREDITORS

    (b) The assignment is for the benefit of all the defendant's creditors. (c) The assignment does not itself create a preference of one creditor or class of creditors over any other creditor or class of creditors, but the assignment may recognize the existence of preferences to which creditors are otherwise entitled. 493.020.

  19. Assignment for the Benefit of Creditors

    As such, the board may decide that a more streamlined, efficient and cost-effective approach for maximizing value is appropriate - an assignment for the benefit of creditors (ABC). An ABC is initiated by the distressed company (the assignor) that enters into an agreement to assign its assets to an unaffiliated, independent entity (the ...

  20. Assignments for the Benefit of Creditors: Florida

    A Q&A guide to an assignment for the benefit of creditors (ABC) in Florida. This Q&A addresses the process by which assignments are generally administered in Florida, including the commencement and administration of the ABC, the duties and actions of assignees, creditor claims, and the jurisdiction of the court. Answers to questions can be compared across a number of jurisdictions (see ...

  21. Chapter 7.08 RCW: ASSIGNMENT FOR BENEFIT OF CREDITORS

    HTML PDF. 7.08.010. Assignment must be for benefit of all creditors. HTML PDF. 7.08.030. Assignment — Procedure — Creditor's selection of new assignee. HTML PDF. 7.08.900. Construction — Chapter applicable to state registered domestic partnerships — 2009 c 521.

  22. Assignments for the Benefit of Creditors

    Assignments for the Benefit of Creditors. Summary. This practice note discusses assignments for the benefit of creditors (also known as a general assignment or ABC). An assignment for the benefit of creditors involves the assignment of all of a company's assets to a third-party assignee.

  23. Chapter 21. Assignment for Benefit of Creditors.

    Assignment for Benefit of Creditors. § 28-2101. Form of assignment. § 28-2102. Extent of assignment — Assets exempt. § 28-2103. Assignee. § 28-2104. Bond of assignee. § 28-2105. Nonperformance by assignee — Trustee. § 28-2106. Duties of assignee. § 28-2107. Preferences prohibited. § 28-2108. Proceedings for benefit of all creditors. § 28-2109.