MCA Financial Group served as Assignee to a mid-sized furniture distributor in connection with an Assignment for the Benefit of Creditors (ABC). The distributor supplied furniture to e-commerce platforms and major retailers in North America, operating from a central warehouse and sourcing products internationally. In 2024, it generated $48.9 million in revenue and maintained approximately forty employees.
Declining financial performance and reduced liquidity led ownership to pursue a sale to satisfy creditor obligations and preserve enterprise value. The distributor engaged an investment banker to explore strategic alternatives and retained MCA to serve as the Assignee and assess the feasibility of executing the transaction through an ABC.
MCA reviewed the proposed transaction structure, assessed the reasonableness of the purchase price, and analyzed financial and operational data to yield the highest possible recoveries for secured and unsecured creditors. This pre-assignment diligence confirmed that an ABC would provide an effective framework for completing the sale, administering the estate and maximizing creditor protection.
During the transaction, MCA coordinated among multiple stakeholders, including the company, the buyer, and advisors to both parties. The firm assisted in preparing and reviewing documentation, verifying schedules, and ensuring a smooth transfer of assets into the ABC structure. The assignment was effectuated immediately before closing, at which point MCA, as Assignee, acted as the legal seller and assumed custody of the sale proceeds.
Post-closing, MCA initiated the statutory ABC processes, including creditor notices, claims intake, and reconciliation, leading to eventual distributions. The firm also oversaw the business’s dissolution and wind-down, including benefit plan terminations, final tax filings, and administrative closure.
The engagement demonstrates the value of integrating pre-closing transaction review with post-closing fiduciary administration, reducing risk and ensuring continuity. It also illustrates the practical application of an ABC in facilitating a going-concern sale in a distributed, inventory-dependent business. The process has proceeded without major disruption, and creditor distributions are anticipated upon completion of the claims period.
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