Assignments for the Benefit of Creditors

ABC’s function as an alternative to the more familiar bankruptcy proceedings that must be filed in one of the federal bankruptcy courts. Similar to a liquidation under Chapter 11 or Chapter 7, the assets of an insolvent debtor under an ABC are transferred to a trust, with a trustee assigned to administer the liquidation and eventual distribution of assets to creditors.

The claim transfer process can vary depending on the Trustee, and the local jurisdiction overseeing the ABC, but as with the purchase of other types of claims, Argo Partners will file the necessary transfer documents to effectuate the assignment.