If you’re thinking about bankruptcy…maybe you should consider an Assignment for Benefit of Creditors (ABC)
by Leon J. Owens
If you’re in business in the digital universe or just on Main Street, USA, look at two other businesses around you, in your “space”, or in your market. The odds are that in the foreseeable future one of you will be going out of business.
If you’re the unlucky one, you’ll have a mountain of debt and a long list of creditors, and you won’t have the cash flow or assets to pay those bills. You’ll probably owe money to creditors who haven’t even surfaced yet (tax bills have a way of sneaking up on you at the worst possible time). Of course, you can try to negotiate settlements with each of your creditors, but you’re already overwhelmed just trying to keep the doors open. Or you can find competent counsel and seek the refuge offered by the bankruptcy courts, and see a Chapter 7 or Chapter 11 bankruptcy discharge destroy your personal and business reputation.
Before you jump off that bridge, why not consider an Assignment for Benefit of Creditors (ABC)? You simply contract with an ABC firm and transfer your assets (not your liabilities) to the ABC assignee. At that point, you are out of the picture, and the trustee then sells those assets at the highest possible price, retains a fee out of the proceeds, and makes a settlement with all your creditors.
The advantages of the ABC are clear:
- It happens quickly, almost instantaneously.
- The ABC almost always gets more for your assets than a bankruptcy court will because the ABC has familiarity with your particular business assets and has the ability to find prospective buyers for them.
- The ABC will explore “soft assets” like intellectual property, trademarks, or copyrights that may help pay off debts.
- The ABC can eliminate creditors claims with lightening speed compared to the bankruptcy process.
- From the time you agree to the ABC, you will be moving on. The headaches will be gone in six months or less.
- Your creditors will generally receive more through an ABC than through a bankruptcy, and they will be much more likely to do business with you in the future.
- The ABC is a non-judicial transaction and avoids an embarrassing stain upon your personal or business reputation.
If this sounds like something you need to know more about…contact me and let’s talk. Real Estate Matters are seasoned specialists in getting good people through a successful ABC with as little pain and suffering as possible.