Assignment for the Benefit of Creditors

An Assignment for the Benefit of Creditors, commonly referred to as an “ABC” is a liquidation strategy for insolvent debtor companies.

An alternative to federal bankruptcy, an ABC is a widely accepted method of liquidating a distressed business.  The debtor company, or assignor, transfers their assets and liabilities to an assignee, typically an LLC created by Ravix solely to serve the purpose of liquidating the company’s assets and distributing the proceeds to the approved claimants.

The ABC allows for the transfer of the assignor’s assets free of the unsecured debts, which buyers view as a way of cleansing title to the acquired assets, with the added benefit of minimizing the potential liability for directors and management.  Unlike bankruptcy, an ABC does not have mandatory court appearances or monthly reporting requirements, and the assignor controls the choice of assignee.  Those features make it a faster, cheaper, yet safe, approach to closing a business.  Collectively, Ravix has decades of experience in the Silicon Valley serving as assignees.