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FAQ

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)?

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 Farlega Partners, LLC and reputation as the leading Assignee in the United States says it all.