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In a Chapter 7 or Chapter 13...
Healthcare Company
Assignments for the Benefit of Creditors
This company was a physician controlled enterprise that operated as an independent practice association. The company accumulated approximately $10 million of secured debt and $30 million of unsecured debt. The company had a dispute with its major secured creditor. Unable to address its debt and to continue to operate on a viable basis, the company made an assignment for the benefit of creditors. The assignee conducted the wind-down of the company and the liquidation of its assets. This minimized ongoing risk facing the company’s management and board and shifted responsibility from them to the assignee for the wind-down/liquidation. Among other things, the assignee negotiated a settlement of the dispute with the company’s secured creditor.