Assignments For The Benefit Of Creditors - A Bankruptcy Alternative

Webinar: ID# 1021506
Recorded CD
About This Course:
This webinar provides an understanding of general assignments and how to recognize when the use of an assignment may be advantageous versus the debtor turning to a liquidation under chapter 7 of the bankruptcy code.


Basics of What Is an Assignment for the Benefit of Creditors
  • Nature of the Assignment Contract
  • Court Supervised vs. Statutory or Common Law Assignments
  • How Is the Assignee Chosen; Who Can Serve as the Assignee
  • Rights and Duties of the Assignee
  • Assets Transferred
  • Responsibility for Creditor Claims
  • Filing of Claims by Creditors (Bar Dates, Requirement to File Claim to Share in Distributions to Creditors)
Impact of Secured Claims on Assignment
  • Validating Secured Creditor Claims
  • Priority of Competing Security Interests Including That of the Assignee
  • Rights of Other Creditors Including Federal Government Claims and Trust Fund Claims
  • Priority of Creditor Claims (State and Local Taxes, Employee Wage Claims, Customer Deposits, Etc.)
Creditor Alternatives to the Assignment
  • Involuntary Bankruptcy
  • Abstention Under Bankruptcy Code Section 305
  • Mandatory Dismissal Under Bankruptcy Code Section 542
Other Creditor Remedies
  • Choice of Creditor Representatives Under Selected State Laws
Benefits and Advantages of Assignments to Bankruptcy
  • Flexibility of the Process (State Dependent)
  • Speed With Which the Assignee Can Liquidate Assets
  • Lack of Court Involvement (State Dependent)
  • Assignee Has the Rights of a Lien Creditor Under Uniform Commercial Code
Disadvantages of Assignments
  • No Court Supervision (State Dependent)
  • Creditors Have No Say in Choice of Assignee
  • Limited Recourse Against Assignee for Breach of Fiduciary Duty in Administering the Assignment Estate
  • Inability to Limit the Impact of Ipso Facto Clauses in Contracts (as Distinguished From Bankruptcy Where Those Clauses Are Void)
Recovery of Preferential Transfers Under State Law and Preemption Issues
  • State Law Recovery Statutes
  • Need to Show Intent to Prefer
  • Impact of Sherwood Partners v. Lycos Case and Case Law That Has Followed Limiting That Decision
About The Presenter

Geoffrey L. Berman
  • Senior managing director of Development Specialists, Inc.
  • Former president and chairman of the Board of the American Bankruptcy Institute and member of ABI's Board of Directors, Executive Committee and Management Committee (April 2010-2014)
  • Ex-officio member of the ABI Commission for the Study of Reform of Chapter 11 (report released in December 2014)
  • More than 35 years of experience in the administration of assignment estates around the country
  • Wrote numerous articles on general assignments, including the ABI publication "General Assignments for the Benefit of Creditors, the ABCs of ABCs," 3rd edition, September 2015; co-wrote an article for the St. John's University Law School Law Review proposing a Model Statutory Scheme for general assignments, 2009
Assignments For The Benefit Of Creditors - A Bankruptcy Alternative
Available on CD format
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