Assignment for the Benefit of Creditors

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Assignment for the Benefit of Creditors

When bankruptcy or receivership may not be the best option, but a company is forced to liquidate their assets to repay creditors, an Assignment for the Benefit of Creditors, or ‘ABC’, can be an effective alternative. An ABC is an insolvency proceeding governed by state law which allows for a distressed company to avoid filing bankruptcy while still maximizing its recovery to creditors. The process is like bankruptcy, however, is a more cost effective, efficient, and private alternative. In fact, in many jurisdictions an ABC doesn’t even require a court proceeding and can yield a greater return of proceeds. When our team enters into an assignment agreement, we quickly go to work to maximize the recovery for creditors. We take full control of operations, effectively manage creditors and the litigation process, and sell assets for a higher amount than businesses would typically be able to yield on their own. Throughout the process we maintain strong communication with key stakeholders and creditors to wind down business operations in an effective, discrete, and orderly manner.