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Assignment for the Benefit of Creditors

Miami bankruptcy Attorneys

An insolvent business has different options to consider. One option is for a business to liquidate its assets to pay its creditors. While bankruptcy is certainly an option to achieve this objective, an alternative is 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 state law and in state court.

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. With 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. 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.

Discuss assignment for the benefit of creditors and other options for your company by calling a Miami, Fort Lauderdale, and West Palm Beach bankruptcy lawyer at (305) 712-6097. 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 Sourth 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 bankruptcy 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, under the state’s assignment for the benefit of creditor proceedings, an 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.

If you are interested in learning more, call Edelboim Lieberman Revah Oshinsky PLLC at (305) 712-6097 for a free, confidential consultation.

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