The ABC stands for the Assignment for the Benefit of Creditors, which is basically the state court equivalent of a Chapter 7. The ABC is often utilized to liquidate a failed or no longer viable business under state law. Florida Statute 727 authorizes the assignment of all assets to a court supervised intermediary, in order to benefit the creditors of a company. This option offers businesses a method for liquidating or selling their business under state court supervision, rather than through the federal bankruptcy court process discussed herein. You are not alone in this, many companies use this as an option.

There are significant differences between bankruptcy and an assignment, and we can cover this in detail when we meet for a free consultation. A bankruptcy can be more expensive and time consuming than the procedure associated with ABCs. Additionally, unlike bankruptcy where Trustees are blindly appointed in Ch. 7 cases, the insolvent business is able to select the Assignee for a quicker and potentially more favorable outcome.

There are times when going with an ABC makes much more sense than electing to file bankruptcy or to engage in any other type of action designed to eliminate the burdens of your business’ debt.