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.
No, it is not.
He must give his consent to the process. He usually is contacted by the Assignee.
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.
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.
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.
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.
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 650.454.8001 or email us at firstname.lastname@example.org.
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.