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RECOMMENDED READING: Assignments for the Benefit of Creditors: An Overview With a California Flavor

Recommended ReadingIn “Assignments for the Benefit of Creditors: Simple as ABC?” Robert L. Eisenbach III provides a brief and clear summary of ABC procedures, and illustrates the process usefully with a hypothetical scenario of a cash-negative company with insufficient money to fund further operations and no likely prospects for credit, and which has specific technology assets that a chapter 7 trustee might not liquidate efficiently. This latter consideration may be particularly important for any guarantor of the failing company’s debt.

An ABC is a state law alternative to chapter 7 bankruptcy, chapter 11 bankruptcy, receivership, composition, or dissolution. Eisenbach notes that there are differences among states, and he applies California statutory ABC to his hypothetical scenario. To learn about the alternatives is to empower yourself for optimal action when trouble comes.

For a case study under Illinois’s common law ABC process, see here. We published here a different overview of ABCs which complements Eisenbach’s. For a fifty-state survey of ABC procedures, plus receiverships, compositions, and workouts, see Strategic Alternatives for and Against Distressed Businesses (Jonathan Friedland, Robert A. Hammeke & Elizabeth B Vandesteeg, eds. 2015). To learn more from the best of the best, please check out the Financial Poise webinar on Strategic Alternatives for Distressed Businesses.

About The DailyDAC Editors

The editors and editorial board of DailyDAC include preeminent restructuring and insolvency professionals, journalists, and editors. They are devoted to providing reliable and plain English education and deal intelligence about assignments, corporate bankruptcy, receiverships, out-of-court workouts and similar topics.

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