Receiverships provide one of the most formidable and practical remedies available to creditors. Upon appointment by the court, Receivers often take exclusive possession of a company, a secured creditor’s collateral, or any other property in need of protection or liquidation. The role typically involves the collection, maintenance, management, and safeguarding of the assets of the receivership estate. This permits the monitoring of funds, assets, and property of any entities under the receivership. The outcome is often a subsequent distribution of these assets under court supervision.
Our assignments involve managing ongoing business activity when fraud or mismanagement has threatened the security of corporate assets and/or aiding in the windup or liquidation of business entities.
Assignment for the Benefit of Creditors
An alternative to liquidating a business or filing for bankruptcy is to follow a procedure called an “assignment for the benefit of creditors,” or ABC. An ABC is a contract by which an economically troubled entity (“Assignor”) transfers legal and equitable title, as well as custody and control, of its assets and property to an independent third party (“Assignee”) in trust, who is required to apply the proceeds of the sale of the property or the liquidation of its assets to the assignor’s creditors in accord with priorities established by law.