Assignment for the Benefit of Creditors (FAQs)

The Assignment for the Benefit of Creditors (ABC) Is an Alternative to a Bankruptcy

Answers To Frequently Asked Questions (FAQs)

Is There an Advantage of a General Assignment for the Benefit of Creditors Over a Bankruptcy?

The General Assignment For The Benefit of Creditor (ABC) is not as lengthy or as costly as a bankruptcy. Many times this equates to a greater recovery and monetization of the assets which can result in much greater recoveries for the creditors. In addition, because court approval is not required to make business decisions in an ABC, the assignee can move quickly which can preserve asset value.

Is Creditor Consent Required?

No, it is not.

Where Does My Secured Lender Fit In?

He must give his consent to the process. He usually is contacted by the Assignee.

Am I Involved or Have Any Control of the General Assignments for the Benefit of Creditor (ABC) Process?

You are not, and you do not. However, on many occasions the assignee may employ the managers and/or founders to assist in the process.

How Do I Make a General Assignments for the Benefit of Creditors (ABC)?

The assignor executes an assignment for the benefit of creditor agreement which has been ratified by the corporate resolutions of the board and its' shareholders.

What Happens to the Corporation?

Once the Assignment for the Benefit of Creditors (ABCs) agreement is executed the corporation is divested of its assets and the assignee takes on ownership and control of all of the assets subject to liens.

How Does the Assignee Take the Assets of the Corporation?

The agreement enables the Assignee to be assigned all of the assets and to be the rightful party to wind-down the corporation. A separate bank account is setup and the proofs of claims are mailed to all parties-in-interest. There are requirements that the assignee must follow regarding proof of claims as stated in the Assignment For The Benefit Of Creditors and Proof Of Claim document.

When Do the Unsecured Creditors Receive Their Distributions?

Unsecured creditors must file their proof of claims within the statutory period of 180 days (Bar Date). Distributions may occur within 60 to 90 days thereafter. However, there may be certain circumstances that can delay these distributions.

How Long Can This Process Take?

Each case is different. It depends on pending litigation, how long it may take to properly monetize the assets and each claim must be reviewed. In most cases, it takes approximately one year.

How Can I Better Understand & Obtain Information On the Assignments for the Benefit of Creditors (ABCs)?

For more information, please call us at 650.454.8001or email us at

General Assignments & Managed Liquidations

Assignment for the Benefit of Creditors

Sherwood Partners, Inc. has been the assignee for both private and public companies and our team understands that it takes much more than just signing a contract with an assignor. It takes a comprehensive strategic plan, to properly monetize the assets for the benefit of creditors.

Managed Liquidations

In some cases, a Managed Liquidation is another route to take when winding down a business operation.

Court Appointed Receivership

Sherwood Partners' ability to maximize the asset value of companies has made our firm one of the preferred Receivers of the Courts as well as the creditors and legal communities.

Advisor to Creditor Committees

Creditor Committees need expertise, coordination, reliability and speed. Sherwood Partners offers all of these qualities.

Sherwood Partners, Inc.

Solutions | Results | Success | Since 1992

1100 La Avenida Street
Building A
Mountain View, CA 94043

Phone: 650-454-8001
Fax: 650-454-8040



The Assignment for the Benefit of Creditors (ABC) also known as a General Assignment is an alternative to bankruptcy. Many of the high profile Assignments have been done by Sherwood Partners, Inc. and our reputation as the leading Assignee in the United States says it all.

Solutions | Results | Success | Since 1992
Silicon Valley | Los Angeles | New York

Since 1992 Sherwood Partners, Inc. has become one of the premier business advisory firms to the restructuring industry.

The Sherwood team of seasoned business professionals provides founders, shareholders and senior executives with more than a report – we at Sherwood go beyond traditional tactics to help make decisions and implement plans that achieve exceptional results.

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