Assignment for the Benefit of Creditors | ABCs
The ABC is an Alternative to Bankruptcy (Assignment for the Benefit of Creditors)
Sherwood Partners, LLC is one of the leading firms in the United States that is called upon when a company decides it needs to make an Assignment for the Benefit of Creditors (ABC). We have been the assignee for both private and public companies. Our team understands the complexities of an Assignment and that it takes much more than signing a contract with an Assignor. It takes a comprehensive strategic plan, to properly monetize the assets for the benefit of creditors.
The last thing any manager, investor or board member wants is to revisit this situation months or years later. Sherwood has been able to fully monetize the assets of the company due to our deep relationship with corporate (both national and international buyers). Sherwood is also the creators of the "Operating ABC". We developed "The Operating ABC" so that the estate can fully monetize the assets for the benefit of creditors.
The benefits of an ABC are numerous. The debtor company selects the Assignee. Once Sherwood Partners, LLC becomes the assignee, we take control and work through the problems of the company. These problems are transferred to the Assignee. The management team, investors and the board can then move forward with their lives and everyday business. Also, the personal liability of directors and officers for running an insolvent company ceases to be an issue once the assignment of assets occurs.
THE BENEFITS OF AN ASSIGNMENT FOR THE BENEFIT OF CREDITORS (ABC) INCLUDE:
- The Assignee is selected by the company and is not court appointed;
- There is usually less notoriety than with a bankruptcy;
- The Assignment for the Benefit of Creditors (ABCs) is cost effective;
- The process is less formal, with few or no court hearings;
- The ability to move with speed (this can be very important in preserving the value of the assets);
- Flexibility to permit smart business choices;
- Usually provides closure and finality to the company, its board and its management;
- Asset sales can occur quickly, allowing for a higher price under such circumstances;
- A third party can acquire title to the assets in a purchase transaction;
- Intellectual property may sometimes be transferred to another entity;
- Limited operations can be continued to maximize the remaining value in company;
- Contractual obligations can be negotiated and resolved efficiently;
- If a press announcement is required, it can be simple and positive, (i.e. “Assets of Widgets, Inc. have been acquired by XYZ Company”.
The Assignment for the Benefit of Creditors (ABCs) process:
- Your company (Assignor) enters into a contract whereby it transfers all rights, titles, interests, custody and control of all assets to an independent third-party trustee (Assignee);
- Assignee acts as a fiduciary for the creditors by liquidating all assets and then distributing the proceeds to the creditors;
- Secured creditors are paid from proceeds derived from their security, relieving them of the legal costs and burden of foreclosing and selling their collateral;
- In this process, the unsecured creditors cannot follow the assets that are sold;
- A formal claims process is established for unsecured creditors, thus allowing the assignee to limit and control ongoing liabilities of the company (Proof of Claims http://www.proofofclaims.com/ );
- Assignee is able to review, control, clean-up and work toward closure to the corporate situation before and during the sale of assets.
Doing it Right Takes More than Just Signing a Contract with the Assignee…It Takes a Strategic Plan!
Since 1999, Sherwood Partners, LLC has been the Assignee to over 350 Assignments for the Benefit of Creditors (ABCs). Some Assignees try to walk the walk, but what they really do is collect boxes of data and try to make the claim that they have successfully monetized the assets of the company. Sherwood is known and considered the premier Assignee in the United States.
In today's complex world the "Operating Assignment for the Benefit of Creditors (ABCs)" is a very useful method to work towards a graceful exit or purchase of assets. If Intellectual property (IP) is involved, it is almost impossible to just collect boxes and wait for the call to properly monetize these assets. Historically, Sherwood has monetized IP higher than any assignee. It is because of how we do an Assignment for the Benefit of Creditors (ABCs) and our relationships. Investors, financial institutions and law firms call upon Sherwood as the Assignee to better monetize certain assets and collect the receivables through the "Operating ABC".
Sherwood is also works with management and the investors to avoid an Assignment for the Benefit of Creditors (ABCs) process and implement a corporate restructuring for a situation that the management team or investors felt was hopeless. We have excellent relationships with most of the financial and legal institutions throughout the United States.
Contact Sherwood Partners to discuss how we can help.