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Assignment for the benefit of the creditors (ABC)(also known as general assignment for the benefit of the creditors) is a voluntary alternative to formal bankruptcy proceedings that transfers all of the assets from a debtor to a trust for liquidating and distributing its assets.
How Do They Differ? Both assignment and novation deal with how rights and obligations under a contract are transferred. A change of control addresses changes to the parties themselves, even as they remain linked to the rights and obligations.
One obvious disadvantage to an ABC is the risk that creditors of the business may feel that they will be better served by liquidation under the Bankruptcy Code, band together and file an involuntary bankruptcy proceeding against the company, potentially voiding the ABC and any transactions that may have occurred or be ...
Simply stated ? an Assignment for the Benefit of Creditors assigns the assets and liabilities of the party making the assignment (the ?Assignor?) to that party's chosen representative (the ?Assignee?).
In every case in which any person makes a voluntary assignment of his or her estate, real or personal, or of any part thereof to any other person in trust for his or her creditors or some of them, the assignee, within 30 days after the execution thereof, shall file in the office of the Register in Chancery of the ...
A recent Delaware Superior Court decision serves as a reminder that, under Delaware law, a merger may well involve an assignment by operation of law ? even if the contract itself doesn't specifically use the term ?merger? in the language defining assignments.
An ABC is a liquidation process governed by state law by which a company (referred to as the assignor or the debtor) assigns all of its assets to an assignee (typically, a professional firm specializing in ABCs) that will manage the liquidation process and distribute the assets' proceeds to the company's creditors in ...