Due to the high cost associated with filing for Chapter 11, RLT has seen a significant increase in the use of a highly flexible state court alternative called an assignment for the benefit of creditors proceeding.
The attorneys at RLT have served as counsel for corporations in the drafting and delivering deeds of assignment for the benefit of creditors commencing these proceedings, as assignees for the benefit of creditors, as counsel to assignees, and as counsel to various creditors and parties in interest in assignment proceedings. RLT can advise you about the full range of options available under an assignment for the benefit of creditors case, whether such involves the ability to obtain a court order authorizing the sale of assets free and clear of liens, claims, interests, and encumbrances, including successor liability claims, the one hundred twenty day preference period applicable in assignment proceedings in comparison to the ninety-day time frame in bankruptcy cases, the requirement to establish actual intent to prefer in the prosecution of preference claims in an assignment proceeding, and otherwise. RLT can also provide a cost-effective defense for your business should it receive a preference demand letter from an assignee.
Frequently, when the prospect of a liquidation of a closely held business enterprise exists, an assignment for the benefit of creditors case may provide the opportunity for an insider purchase of the business enterprise, and the resulting new start, unencumbered by old debt.