Assignment for the
A sound alternative to bankruptcy
In economic uncertainty, many corporate boards of directors conclude that turning around their distressed businesses is not feasible.
The Assignment for the Benefit of Creditors (ABC) is a state-law winddown process that allows for a cost effective and timely closure of the business. The ABC identifies and appoints an independent fiduciary representative, herein referred to as the Assignee. The Assignee manages the winddown of the business and monetizes the company’s assets for the benefit of the company’s creditors. The Assignee then distributes the proceeds generated from the sale of the company’s assets to the company’s creditors in accordance with state law.
MCA’s expertise in ABCs:
The professionals at MCA Financial Group understand the complexities of the effective administration of an Assignment, and understand an ABC takes much more than simply signing a contract between the Assignor (the Company) and the Assignee. Our team takes the appropriate time to acquire a deep understanding of each specific situation. We then develop a comprehensive strategic and tactical plan to properly and efficiently monetize the assets for the benefit of the creditors.
Our proven success in distressed business and asset sales ties back to our more than two decades of leading and managing distressed sales and is enhanced by our professional relationships with both financial and strategic buyers. Within our network, our team will make connections to identify the ‘right contact’, which is the key to a successful monetization process.
Assignee in an Assignment for Benefit of Creditors (ABC)
MCA Financial served as the Assignee in an Assignment for Benefit of Creditors (ABC) to a national company headquartered in California and generating annual revenue in excess of $80MM.
The ABC was initiated by the insolvent company, which sought a faster, less expensive, and more flexible liquidation mechanism than formal bankruptcy proceedings. The company selected MCA due to MCA’s strong expertise in executing distressed sales and its ability to cut through the noise that normally accompanies such deals.
MCA stepped in to run operations and manage a fast, but complex, business sale process. MCA produced a 13-week ABC budget with approval from the secured lender, which was essential to operating and strategically marketing the company to interested buyers. MCA identified key transition obstacles and generated practical solutions in order to avoid delays. Its team of experts ensured all parties adhered to the agreed upon plan and timeline. The smooth transition of merchant accounts, vendor relationships, employees, and employee benefits was carried out.
MCA’s role in the Assignee for Benefit of Creditors led to the successful and well-organized going concern sale of the distressed entity in less than 30 days, significantly benefiting the employees, who were in large part retained by the buyer, and the secured creditor.
FROM MORRIE AARON • MCA FOUNDER
“You have our personal commitment that MCA will provide the highest quality work to its clients in a timely manner. Confidentiality and trust are important ingredients in any business relationship and MCA is committed to these values.”
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OUR MCA PROFESSIONALS
MCA Financial Group provides senior-level teams that specialize in four practice areas to meet your financial and business needs. Each team is directed by an accomplished Senior Managing Director who possesses the requisite frontline experience necessary to provide personalized attention.
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