CLE Webinar: Ask the Trustee
In a Chapter 7 or Chapter 13...
Assignments for the Benefit of Creditors
The most significant asset of this company was a film library. The company had no secured debt, unsecured debt of approximately $20 million, and had received equity investments totaling $15 million. The company had inadequate operating cash flow and the value of its assets were clearly less than the outstanding debt. Under these circumstances, an ABC was utilized to implement an auction process that facilitated an advantageous sale transaction and material distribution to unsecured creditors, with one of the investors in the company being the winning bidder and acquiring the assets free and clear of the company’s debt.