Assignment for the Benefit of Creditors
An Assignment for the Benefit of Creditors is a business liquidation device available to a Debtor as an alternative to a formal bankruptcy case filing. It is a state court, rather than a federal court proceeding – and therefore governed by state law. The “Assignment” is a contract whereby the troubled entity (Assignor) transfers legal and equitable title, as well as custody and control, of corporate assets and properties to a third party (Assignee) and the proceeds received from the liquidation are used to pay the debts of the Assignor in accord with designated priorities. The Ryan Law Firm has filed many Assignment for Benefit of Creditor cases and is very familiar with the process. An “ABC” case is another alternative to business restructuring/liquidation that should be investigated by anyone with a company in severe financial distress