Assignment for the Benefit of Creditors: 3 Benefits

An Assignment for the Benefit of Creditors (ABC) is a state-law alternative to Bankruptcy that has been growing in popularity among business owners seeking to dissolve a company. The process involves an appointed Assignee who is tasked with liquidating the insolvent company’s assets and dispersing the proceeds to creditors and relevant stakeholders.

While there are some similarities between a traditional Bankruptcy and an Assignment for the Benefit of Creditors, there are several distinct and significant benefits that have more and more businesses opting for an Assignment for the Benefit of Creditors.


One of the largest benefits of an ABC is the control that it offers the business owner. While bankruptcy requires a Court appointed Trustee to liquidate assets, an ABC allows the business owner to select a qualified Assignee to liquidate the business’s assets.

This results in a much more efficient liquidation process, and allows the business owner to select an Assignee with domain or industry experience that can garner top dollar for the business’s assets.


Since an ABC requires few (if any) court proceedings, the process can typically be completed much more quickly and efficiently than filing for Bankruptcy. This is particularly beneficial when assets need to be liquidated quickly in order to preserve the asset’s value.

Dissolving a company as quickly as possible through an ABC also leads to an overall less expensive liquidation process than with a traditional bankruptcy.

Lower Visibility

Liquidating a company through an Assignment for the Benefit of Creditors is almost always completed more discreetly than a bankruptcy proceeding. Since an ABC does not require a traditional Court filing, it allows the insolvent business to decide if, how, and when any public announcements are made.

For more information on whether or not an Assignment for the Benefit of Creditors is right for your business, please reach out to Jim Gansman at 201-315-2521.