Assignment for the Benefit of Creditors in Fort Lauderdale
Experienced Legal Support for Your ABC Liquidation Process
If your company is struggling to stay afloat due to mounting levels of debt, you may be considering bankruptcy, a federally governed method of reorganizing and discharging debt. Florida, however, offers an alternative to bankruptcy: Assignments for the Benefit of Creditors (ABC). Depending on your unique circumstances, this state court procedure may be a more efficient and cost-effective method of liquidizing assets and, ultimately, achieving your financial goals.
LSS Law have 70+ years of combined legal experience, and we have helped countless clients turn their businesses around with procedures like the ABC. If this option is right for you, we can provide both counsel and representation at every step of the process, advocating for your best interests along the way.
The ABC Liquidation Process
In an ABC, your company is referred to as the assignor, and the assignee assesses your company’s financial affairs and liquidates your company’s assets. The assignee then takes the proceeds from this liquidation and pays your company’s creditors. You can then claim any remaining proceeds.
Unlike bankruptcy, the ABC liquidation process does not order an automatic stay of collection attempts, and it doesn’t allow companies to discharge debt. However, the assignee is one of the major reasons businesses choose an ABC over bankruptcy. Your company, with our guidance and support, selects a professional assignee with years of experience liquidizing assets and running businesses. Through this process, you can maintain a level of involvement you wouldn’t experience during bankruptcy.
Prior to the commencement of the assignment process, our team at LSS Law will spend a significant amount of time with your company’s principals.
In our preparation process, we:
- Conduct extensive due diligence
- Vet your company’s various assets
- Assess your company’s liabilities (even those that may not have matured)
- Predict what issues may arise in the assignment procedure
- Determine whether you can achieve your strategic objectives through the ABC
If we conclude the ABC is still the most appropriate strategy for your goals, we will facilitate meetings and discussions with potential assignees. Once you select your assignee, and the assignee agrees to undertake your assignment case, our team will draft the schedules and document the assignment. During this process, we will maintain on-going communication with the prospective assignee to determine and implement optimal timing.
The assignee will then obtain documents from your company’s key personnel to assess financial affairs and determine whether third parties owe assets or funds to your company. Within 30 days of commencement, the assignee will conduct the deposition of the company’s key principal. In other words, we will transfer ownership and control of your business’ estate to the assignee. LSS Law will assist you during this process to ensure it goes as smoothly and efficiently as possible.
An Alternative to the ABC: Chapter 7 Liquidation
If our team concludes the ABC process is not right for your business, we may recommend liquidation through Chapter 7 Bankruptcy instead. While you retain less control and involvement, you may be able to discharge outstanding debt after the liquidation process.
During Chapter 7 Bankruptcy, your business stops operating, and the trustee conducts an orderly liquidation of assets to pay your company’s creditors. Because Chapter 7 does not recognize exemptions (unlike Chapter 13), all of your company’s property and assets will be liquidated to pay the creditors. When the proceeds have paid all possible contracts, utility bills, lease obligations, loans, credit cards, and other business debts, your business is no longer liable for any of its debts. You and any other business owners are also released from liability unless you are personally liable for the debts through a contract.
You may consider Chapter 7 liquidation if your business:
- Wants to cease operations and have an organized means for liquidating assets
- Is a defendant in multiple lawsuits
- Has liabilities that exceed its assets
- Is renting space and needs relief from an onerous lease
- Would like to sell its assets free of any and all claims
- Needs relief from burdensome contracts
Take the First Steps Toward Debt Relief Today
The ABC state procedure is a highly specialized area of law. Our Miami team at LSS Law have substantial experience representing not just assignors but also assignees, creditors, shareholders, and purchasers of assets in Florida ABC proceedings. We have a thorough understanding of each party’s role, responsibilities, and motivations, and we use this perspective to inform our counsel and representation. If the ABC process is not right for you, we can recommend other solutions like Chapter 7 Bankruptcy to help you accomplish your financial goals.
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