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In a Chapter 7 or Chapter 13...
Advertising/Marketing Company
Assignments for the Benefit of Creditors
This company was a public company that provided online and offline marketing and customized branding solutions to Fortune 1000 companies. The company concluded that an ABC was in the best interests of its stockholders and creditors after considering a number of factors, including the company’s financial projections and continuing negative cash flow; the overall debts of the company; the litigation claims to which the company was subject; the inability of the company to continue to fund its existing operations with its current cash flow; the inability of the company to attract a purchaser willing to acquire the company or substantially all of its assets outside of an insolvency process; the level of competition in the custom printing industry; the severe slowdown in the industry as the general economy fell into recession and spending on advertising, marketing and promotion decreased significantly; and general economic conditions.
Management and the board of the company determined that a sale of substantially all of the company’s assets facilitated through an ABC was the best available alternative. Because the company was a public company, a proxy statement to obtain approval of the ABC and a prepackaged sale transaction was transmitted to stockholders, approval obtained, the ABC commenced, and a sale promptly consummated.