Assignment for the Benefit of Creditors

Attorneys for Assignment for the Benefit of Creditors

Filing an ABC under Florida Statute

ABC Attorneys throughout Florida

Assignment for Benefit of Creditors

In an assignment for the benefit of creditors, the insolvent company (assignor) enters into a legally-binding agreement with a party (assignee), who will act in a fiduciary capacity to wind down and liquidate and/or transfer the assets with Court supervision. The assignee’s fiduciary duty is to the assignor’s creditors, meaning the assignee must act in the best interests of the creditors in these proceedings. In some cases, pursuing an assignment for the benefit of creditors might be preferable to the filing of a federal bankruptcy.

An insolvent business has different options to consider in winding up its affairs. One option provided to such Creditors under Florida Statute is for a business to liquidate its assets to pay its creditors. While bankruptcy is certainly an option to achieve this objective, an alternative strategy is for the insolvent business to consider an assignment for the benefit of creditors, also known as an ABC. Unlike bankruptcy cases, which are filed in federal court, assignments for the benefit of creditors are handled under Florida state law and in state court. The Florida statutes governing assignments for the benefit of creditors can be found here.

An assignment for the benefit of creditors is similar to the liquidation of a business entity under Chapter 7 of the United States Bankruptcy Code, with the advantages of limiting negative publicity for the company and avoiding other negative repercussions for directors and management. If you’d like to learn more about assignments for the benefit of creditors prior to retaining a lawyer, please visit this free (shorthanded) resource.

After a successful assignment for the benefit of creditors, asserts will be liquidated and used to pay off creditors. The creditors will normally only take a percentage of what the debtors asserts are sold for. ABCs work particularly well when pursued as an alternative to a large liquidation. Our attorneys have achieved sustained success with assignments for the benefit of creditors.

Discuss your ABC case and other options for your company by calling a Miami, Fort Lauderdale, and West Palm Beach lawyer at (305) 768-9909. Edelboim Lieberman Revah Oshinsky PLLC can offer knowledgeable insight.

ABC: A Bankruptcy Alternative for Businesses in Miami, FL

As the manager or owner of a business in the Miami and surrounding South Florida area, you may be considering bankruptcy or another alternative to cease operations of a distressed company and wind down its affairs. A manager or owner of an insolvent business you may owe fiduciary duties to your creditors to ensure that your business affairs are properly wound up and operations are concluded. You should seek legal skilled legal representation for this process because each decision you make can have repercussions.

An assignment for the benefit of creditors is one option to consider with your counsel, but it is essential to fully understand all of the benefits and possible risks associated with an assignment for the benefit of creditors.

Our Miami ABC attorneys can provide the information you need and can represent your interests. We have extensive experience with representing businesses in almost every industry in these matters.

In Florida law, in an assignment for the benefit of creditor proceedings, the designated assignee will carry out the following duties:

  • Gather and liquidate/transfer the assignor’s assets;
  • Give notice to creditors;
  • If necessary, conduct business operations for the assignor;
  • Pay administrative expenses, if necessary;
  • Complete accounting and furnish records to interested parties;
  • Examine the assignor’s representative;
  • Evaluate possible litigation claims;
  • Pay dividends if needed and appropriate; and
  • Submit a final report to the court.

Call Edelboim Lieberman Revah Oshinsky PLLC at (305) 768-9909 for a free, confidential consultation.

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