DelCotto Law Group understands financial distress can grow over time or arise suddenly. Our lawyers have broad and deep experience and a calm level-headedness which fosters 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, which is transferred to benefit all creditors.
- A special assignment can be the transfer or all or a portion of 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.
DelCotto Law Group represents debtors, creditors, and assignees in ABC’s. 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 or creditors, as well as court-approved assignees, trust DelCotto Law Group’s reputation and experience to help them manage the court-supervised liquidation process.