Assignment for Benefit of Creditors
The attorneys of DelCotto Law Group understand that a financial crisis can occur whether it is expected or not. The firm has lawyers with broad and deep experience who have the calm level-headedness to help find the solution that’s right for each individual situation. Any business under financial stress and in debt may consider Assignment for Benefit or Creditors as a course of action in lieu of filing for bankruptcy. This option provides a level of flexibility that bankruptcy does not and is a cost effective tool, depending on the goal of the business. There are three types of assignments that are categorized according to the limitation imposed upon the arrangement:
- A general assignment is one involving the transfer of one’s entire property for the benefit of all the creditors
- A partial assignment is one in which only part of the property is transferred to benefit all the creditors
- When property is assigned to benefit only designated creditors, it is a special assignment.
The assignment results in the property being beyond the control of the debtor. It is different from agency arrangements, pledges, or mortgages. The debtor is the assignor and the person who takes legal title to the property is the assignee. The assignee is considered a trustee and his or her duties and responsibilities to the debtor's creditors are the same as a trustee's to the beneficiaries of a trust. The document that embodies the terms of the assignment authorizes the assignee to liquidate the debtor's property in satisfaction of the creditors' claims against the debtor as quickly as possible. The entire proceeding is under the auspices of the Kentucky District Courts and state statutes. DelCotto Law Group represents both debtors and creditors in assignment situations, as well as the court-approved assignee. Representing businesses undergoing the assignment process is very different from representing the creditors. The firm attorney’s have the experience that enables them to successfully aid the debtor and also work to enhance recovery for creditors. DelCotto Law Group’s lawyers are well informed about the many aspects that need to be examined and the obstacles that may arise. Clients considering assignment for benefit or creditors, as well as court-approved assignees, trust DelCotto Law Group’s reputation and proven success record to help them manage the court supervised liquidation process.






