Composition with Creditors -- Transfer of Property to Trustee for Benefit of Creditors

• Category: Contracts - Composition with Creditors
• State: Multi-State
• Control #: US-0940BG
• Format: Word; Rich Text

Description

A composition agreement is an agreement made between an embarrassed or insolvent debtor and two or more of his creditors that each of the creditors entering into the agreement will be paid a specified amount, less than the whole of their claims, and the creditors agree to accept such payment in full satisfaction of their claims. The agreement works substantially an accord for which the consideration is the satisfaction to be made by the debtor, and such an accord is no bar to suit on the original debt, unless the satisfaction is performed. Composition with Creditors -- Transfer of Property to Trustee for Benefit of Creditors is a process by which an insolvent debtor transfers assets to a trustee for the benefit of creditors. The trustee then liquidates the assets and distributes the proceeds to the creditors according to their respective claims. It is a form of debt restructuring in which the creditors agree to accept a reduced amount in full satisfaction of the debt. This process is often employed when a debtor is unable to pay its debts in full and is most commonly used in bankruptcy proceedings. There are two different types of Composition with Creditors -- Transfer of Property to Trustee for Benefit of Creditors: 1. Voluntary Transfer of Property to Trustee: This type of transfer occurs when the debtor voluntarily transfers its assets to the trustee and agrees to the terms of the composition. 2. Compulsory Transfer of Property to Trustee: This type of transfer occurs when a court orders the debtor to transfer its assets to the trustee.

Composition with Creditors -- Transfer of Property to Trustee for Benefit of Creditors is a process by which an insolvent debtor transfers assets to a trustee for the benefit of creditors. The trustee then liquidates the assets and distributes the proceeds to the creditors according to their respective claims. It is a form of debt restructuring in which the creditors agree to accept a reduced amount in full satisfaction of the debt. This process is often employed when a debtor is unable to pay its debts in full and is most commonly used in bankruptcy proceedings. There are two different types of Composition with Creditors -- Transfer of Property to Trustee for Benefit of Creditors: 1. Voluntary Transfer of Property to Trustee: This type of transfer occurs when the debtor voluntarily transfers its assets to the trustee and agrees to the terms of the composition. 2. Compulsory Transfer of Property to Trustee: This type of transfer occurs when a court orders the debtor to transfer its assets to the trustee.