Court-Appointed Roles - Assignee for the Benefit of Creditors
An Assignment for the Benefit of Creditors (“ABC”) is a cost effective alternative to liquidation under Chapter 7 bankruptcy law. The ABC involves transferring the control and custody of an assignor’s property to a third party–the Assignee. The Assignee will then liquidate the property and apply the proceeds to the payments of the assignor’s debts, through distribution to the creditors as in agreement with the priorities established by law. The ABC process saves time and expenses in concluding the affairs of an insolvent company, which also proves to be advantageous to the debtor and its creditors alike.
Prior to accepting an ABC, we review potential scenarios for the survival of the company and assess whether the company is a suitable candidate for one of the following three types of ABC’s:
General Assignment involves all of the debtor’s property being transferred to the Assignee to be liquidated and distributed to all of the creditors.
Partial Assignment involves only part of the debtor’s property being transferred to the Assignee for liquidation and distribution to all of the creditors.
Special Assignment is where property assigned to be liquidated is to benefit only designated creditors.
The Assignment for the Benefit of Creditors is a private way to solve a debtor’s insolvency. Through our network of connections, our professionals can assist in successfully maximizing the value of assets for the benefit of an estate.