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What is an Assignment for the Benefit of Creditors? An assignment for the benefit of creditors is a legal procedure available in many, but not all, states. Commonly referred to as an “ABC,” the procedure is one of several legal[...]

You’re elated. You just won a hard-fought trial and obtained a money judgment against a corporate defendant. You believe the defendant/judgment debtor has the means to satisfy the judgment, but it refuses to pay voluntarily and is stonewalling you. It’s[...]

In some cases, the filing of a proof of claim by a creditor may not be prudent. Before filing a proof of claim, the creditor should carefully consider the potential effects on the creditor. Generally, proofs of claim are not[...]

An Assignment for the Benefit of Creditors (ABC) is a state law alternative to chapter 7 bankruptcy, chapter 11 bankruptcy, receivership, composition, or dissolution. In “Assignments for the Benefit of Creditors: Simple as ABC?” Robert L. Eisenbach III provides a[...]

Let us suppose that a provider of tax resolution services to a large number of customers borrows cash secured by accounts receivable it generates and other personal property (but not by real property).   Let us further suppose that the borrower’s[...]

Defining the Legal Rate in a Solvent Debtor Bankruptcy Using Contract Rate and States’ Statutory Rates of Interest Chapter 11 bankruptcies generally find the debtor to be insolvent, but not always. Occasionally, a debtor will emerge from the bankruptcy process[...]

When a borrower defaults on its loan agreements, a lender may, among other options, sue to foreclose on its collateral and collect from the borrower. The lender, however, may instead agree to amend the loan documents or enter into a[...]

Editors' Note: This is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to [email protected], and we will try to answer it. Question B. James asks, “I own a company that[...]

Revisiting the Jevic Case and the Absolute Priority Rule It’s a familiar scenario: a highly-leveraged debtor files for traditional chapter 11 bankruptcy (as opposed to under Subchapter V of chapter 11) and substantially all of its assets are sold under[...]

The ABCs of ABCs, Business Bankruptcy, & Corporate Restructuring/Insolvency A company typically files for chapter 11 protection because the claims against it exceed the value of the company’s assets (“balance sheet insolvency”) or because the company cannot pay claims against[...]

Which is Better: Debtor in Possession or Chapter 11 Trustee? The mere act of filing a chapter 11 bankruptcy petition significantly alters the relationship between a debtor and its creditors, yet, perhaps surprisingly, the filing does not automatically trigger the[...]

Editors' Note: This article is a preview of a chapter that will be included in the forthcoming 2022-2023 edition of STRATEGIC ALTERNATIVES FOR AND AGAINST DISTRESSED BUSINESSES (“Alternatives”) and it is copyrighted by Thomson Reuters. It is published here by[...]

Editors' Note: This is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to [email protected] and we will try to answer it. Question Howard S. writes, I work for a company[...]

Editor’s Note: this is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to [email protected] and we will try to answer it. Question Robin T. wrote in asking, I own a small retail[...]

Editor’s Note: this is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to [email protected] and we will try to answer it. Question Tom S. wrote in asking, I am a hard money[...]

Editor’s Note: this is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to [email protected] and we will try to answer it. Question Russell S. wrote in asking, “I have a real estate[...]

Just Because a 363 Sale Says Free and Clear, Does Not Mean It’s True A bankruptcy debtor is offering commercial property in a section 363 sale. It is an attractive property and Lou is considering purchasing it. Lou has heard[...]

Bankruptcy Reporting Requirements Before and During Chapter 11 One of the  central principles of bankruptcy is that a debtor should have the benefit of a “fresh start.” However, to accord such relief, the Bankruptcy Code, Bankruptcy Rules, and case law[...]

Is Court Approval Necessary for a Sale in a Delaware ABC Case? For many small insolvent companies, an assignment for the benefit of creditors (ABC) can be more attractive than a federal bankruptcy case to maximize value and sell or[...]