Assignments for the Benefit of Creditors
Ravin Greenberg is one of the leading firms in the state that is called upon when a company decides it needs to make an Assignment for the Benefit of Creditors (ABC). Our lawyers have been appointed or selected as Assignees (the fiduciary managing the process) for both private and public companies. Our team understands the complexities of an ABC, in that It takes a comprehensive strategic plan to properly monetize the assets for the benefit of creditors.
We have the ability to fully monetize the assets of the liquidating company due to our deep relationships with national and international buyers. RGF is a proponent of the “Operating ABC, which was recently developed to fully monetize the assets for the benefit of creditors.
An ABC is an insolvency proceeding governed by state law rather than federal bankruptcy law. The benefits of an ABC are numerous:
- The company itself selects the Assignee
- An ABC is usually much cheaper than a Chapter 11 or Chapter 7
- The ABC process is faster than a proceeding under the Bankruptcy Code, and sometimes more predictable
- Finally, there is far less “red tape” in an ABC, giving the Assignee a degree of freedom to work with the distressed company in fashioning creative solutions
Whatever the problem, our Attorneys will evaluate all scenarios, including an ABC as an alternative to a bankruptcy filing, in order to find a practical solution.
Another alternative to resolving a company’s financial problems is the out-of-court workout. The cost and complexity of Chapter 11 make out-of-court solutions preferable in many situations, but we also evaluate whether recalcitrant creditors or particular provisions of the Bankruptcy Code may make an in-court restructuring better or more appropriate. For those matters best handled outside of court, we call upon our experience in corporate transactions, commercial finance and real estate to enable us to understand the intricacies of distressed situations, to develop comprehensive strategies for the resolution of our clients’ problems and to implement the legal aspects of a workout.
Before filing any in-court proceeding, we will often explore and analyze all out-of-court options, including:
- Debt Restructuring
- Debt Negotiation
- Renegotiating Interest Rates
- Pledging Collateral and Restructuring Security Agreements
- Exchanging Debt for Equity