Recognize when the use of an assignment may be advantageous versus the debtor turning to a liquidation under Chapter 7 of the bankruptcy code.
Receive an overview of the basics to general assignments for the benefit of creditors, a state law alternative for the liquidation of a distressed business that while long available under state laws, has had little use outside of states such as California, Illinois, Florida and Massachusetts. States such as Washington and Minnesota have enacted new statutory schemes addressing the use of ABCs (as receivership actions) and other states are considering new statutory schemes as well. The fiduciary nature and responsibilities of the assignee will be covered, as will the advantages and disadvantages to the process as compared to bankruptcy. Gain a better understanding of the nature of general assignments and when the use of an assignment may be advantageous versus the debtor turning to a liquidation under Chapter 7 of the bankruptcy code.
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Why Lorman?
Over 37 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
Agenda
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
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Why Lorman?
Over 37 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
Credits
OnDemand Course
This course was last revised on January 20, 2021.
Call 1-866-352-9540 for further credit information.
- CA MCLE 1.5
- Lorman Education Services is a State Bar of California approved MCLE sponsor and this course qualifies for 1.5 CLE hours of participatory credit.
To earn each credit Lorman offers through the OnDemand learning platform, you need to watch 100% of the program. Also, for certain credits you will need to fulfill additional requirements which will be displayed on the "credits" tab when viewing the course.
This program does NOT qualify, nor meet the National Standard for NASBA accreditation.
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Why Lorman?
Over 37 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
Faculty
Geoffrey L. Berman
Development Specialists, Inc.
- 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, 2002-2014; 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 40 years of experience in the administration of assignment estates around the country
- Author of ABC’s Book on ABC’s (General Assignments for the benefit of Creditors, The ABC’s) 4th edition
- 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
- J.D. degree, Southwestern University School of Law, Los Angeles, California; B.A. degree, University of the Pacific, Stockton, California
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Why Lorman?
Over 37 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
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