Is An Assignment For Benefit Of Creditors A Better Option For Struggling Businesses?
For businesses in Florida that are in financial trouble there are options other than bankruptcy, such as an assignment for benefit of creditors. The business attorneys at Aaronson Schantz Beiley P.A. in Miami, Florida, work with each company that they represent on an individual basis, helping each determine whether an assignment for benefit of creditors, also known as an “ABC”, is the best route to take.
Bankruptcy Versus ABCs
In the state of Florida, Ch. 727 of the Florida Statutes authorizes the assignment of all assets to a court supervised fiduciary, that we help you select, for benefit of the creditors of the company. This option offers businesses a method for liquidating or selling their business under state court supervision and authority rather than through the federal bankruptcy court process discussed herein.
In Florida, the ABCs are generally equivalent to a Chapter 7 bankruptcy sale. There are, however, various significant differences between bankruptcy and an assignment which we will explain to you in detail once we meet. By way of highlight, a bankruptcy is usually more costly 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 and streamline the process for a quicker and more predictable outcome that may even include the continued operation of your business and sale as a going concern.
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. A veteran business lawyer will be able to advise you if this is an action that you can and should take.
Making A Decision
First and foremost, always remember that decisions regarding bankruptcy, assignment for benefit of creditors, restructuring and insolvency and other possible solutions to a company’s inability to pay its debts are dependent on the specific situation and circumstances of the company. There’s a reason why businesses are given various choices when it comes to their inability to pay back debt and remain liquid.
In making a decision concerning an ABC, one must consider how important the following factors are in your particular situation:
- Timing: Do you want to control when things happen?
- Cost: Are you interested in going a less costly route?
- Simplification: Would you like less red tape, such as schedules and court requirements?
- Creditor cooperation: Are you looking for the creditor to agree to terms easily and quickly?
If your answers to the above questions are “yes,” then assignment for benefit of creditors may be the best path for you.
Looking For The Right Lawyer
First, if your company is experiencing financial distress and is unable to pay its debts, then you want to seek advice from a business lawyer who thoroughly understands and is experienced in a range of options, including bankruptcy, business workouts, restructuring and insolvency and assignments for benefit of creditors. Your attorney should be able to assess your present situation and review what options are available to you and which ones will be most helpful in alleviating the pressures of mounting debt.
Always look for an attorney who is communicative, who will answer your questions clearly and completely, and who is able to provide you with timely service. Also, a lawyer who is a savvy negotiator can be a major help in dealing with creditors.
Get Help Now
It is always better to seek help sooner than later. Thus, if your business is experiencing financial distress due to mounting debt and you have questions regarding the process and practicality of an assignment for benefit of creditors, please contact Steve Beiley at Aaronson Schantz Beiley P.A. in Miami, Florida, by calling 786-600-6940 or contact us by using the short form below to set up an appointment for an initial, free consultation.
We will review your situation, offer you an assessment of your possible choices, and help you begin the process of dealing with creditors and unpaid debt. Besides ABCs, the lawyers at Aaronson Schantz Beiley P.A. are competent, knowledgeable and experienced in facilitating business bankruptcies, workouts, assignments, restructuring and liquidation. Make sure you work with an attorney who can help you in the manner that will best benefit you.