Assignment for the Benefit of Creditors in Jacksonville
Bankruptcy Attorneys Assisting Clients in Northeast Florida & Southeast Georgia
If your business has gone belly up, it’s important to know that you have options when you’re considering bankruptcy. In addition to filing for Chapter 7 bankruptcy, businesses have the option of filing an Assignment for the Benefit of Creditors (ABC).
An ABC, governed by state laws, is a procedure that liquidates a failed, insolvent, or nonviable business. Many businesses opt for ABCs over traditional bankruptcy proceedings because they tend to be less expensive, which means larger payouts are possible to both unsecured and secured creditors.
What Is the Assignment for Benefit of Creditors Process in Florida?
During the ABC process, the assignor, or the business, transfers all of its assets and liabilities to the assignee, which is typically another individual or business. Through this conveyance, the assignee attempts to sell or liquidate the assignor’s property or proceeds.
It is common for this process to be used to facilitate the sale of the assignor’s business to another business entity. The assignee then applies the liquidation of the property or proceeds of a sale to the assignor’s debts, returning anything leftover to the assignor. It’s important to note that unlike Chapter 7 bankruptcies, there is no automatic stay in ABCs.
At Lansing Roy, P.A., we take the time to guide the assignor and the assignee through the liquidation process. We assist in forming the contract in advance, securing creditor approval when it’s needed, and facilitating of the assignment procedure.
What Are the Benefits of ABCs?
Compared to a Chapter 7 bankruptcy, many of benefits of ABCs effect both the assignor and the creditors.
Some of these benefits are:
- An ABC may better preserve the value of any assets involved in the process
- An ABC may achieve resolution faster and more economically
- An ABC saves a creditor time and the expense of proceeding with foreclosure sales or lengthy bankruptcy liquidations
- An ABC saves an assignor time and money because it’s less costly than filing for a Chapter 7 bankruptcy
- An ABC allows the assignor to choose an assignee, which means they can select someone qualified and knowledgeable about business and the liquidation process as opposed to a court appointed assignee who is typically an independently operating lawyer or accountant
- An ABC allows the assignor to decide what is going to happen before and during the ABC process
The experienced Jacksonville ABC lawyers at Lansing Roy, P.A. ensure that all creditors will receive a full report of the liquidation of the assignor’s assets and enforce an equal distribution of assets.