Assignment For The Benefit Of Creditors (ABC)
DelCotto Law Group PLLC understands financial distress can grow over time or arise suddenly. Our lawyers have broad and deep experience and calm level-headedness that foster our analysis of each individual situation. A business under financial stress should consider an Assignment for the Benefit of Creditors (“ABC”) as an option in lieu of filing for bankruptcy. An ABC offers a level of flexibility that bankruptcy does not and can be a cost-effective tool, depending on the goal of the business. There are three types of assignments identified by their limitations and purposes:
- A general assignment involves the transfer of all property for the benefit of all creditors.
- A partial assignment involves only a portion of the property being transferred to benefit all creditors.
- A special assignment can be the transfer of all or a portion of the property to benefit only designated creditors.
An assignment means the property is no longer under the control of the debtor but under the control of an assignee appointed by a state court. The assignee is considered a trustee whose duties and responsibilities to a debtor’s creditors are the same as those of a trustee to the beneficiaries of a trust. The document that assigns the property authorizes the assignee to liquidate the debtor’s property to satisfy creditors’ claims against the debtor as quickly as possible.
The DelCotto Law Group PLLC represents debtors, creditors and assignees in ABCs. The firm’s lawyers are well-informed about the many aspects of the assignment process that must be assessed and the obstacles that may arise during the process. Clients considering assignment for benefit of creditors, as well as court-approved assignees, trust DelCotto Law Group PLLC’s reputation and experience to help them manage the court-supervised liquidation process.
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