When real estate brokers are faced with...
An Assignment for the Benefit of Creditors (ABC) is a business disposition (sale or liquidation) device available to insolvent debtors as an alternative to formal bankruptcy proceedings. Unlike federal bankruptcy proceedings, state law governs ABCs.
An ABC can serve as a useful and efficient means of accomplishing a wind-down and the liquidation or going concern sale of a troubled business unable to reorganize. It can be used to maximize a secured creditor’s recovery from the assets of a distressed debtor, and/or facilitate a buyer’s acquisition of a troubled business or assets from an entity burdened with unsecured debt (and with the cooperation of secured creditors, secured debt).
SulmeyerKupetz has a long history of experience with ABCs prior to the meltdown suffered in the dot-com and technology business sectors in the early 2000s. During that time of difficulties for dot-com and technology companies, we were at the forefront of the use of ABCs to facilitate going concern sale transactions, wind-downs, and liquidations. Since then, SulmeyerKupetz has continued our active representation of companies evaluating ABCs as an option, assignees, buyers, creditors, and other parties in connection with ABCs.