11. Does an Assignment for the Benefit of Creditors require general creditor consent?
Creditors consent to an ABC is not required and, as a matter of course, is not sought. That is why it is important to have prompt and regular communications from the Assignee to the Creditors.
It is our practice to give notice of the ABC to the Creditors within days of making the General Assignment
It is also our practice to give regular reports to the creditors regarding the status of the liquidation including a summary of the receipts and disbursements.
Creditors may, pursuant to the Bankruptcy Code, petition the court to grant an involuntary bankruptcy for the Assignor.
If the Assignor has selected a reputable and professional assignee, such as Equitable Transitions, the Bankruptcy Court has routinely recognized the ABC as a viable alternative and has abstained from exercising jurisdiction over the Assignor's assets through a bankruptcy
The Bankruptcy Court has awarded attorney's fees in defending the involuntary bankruptcy which were required to be paid by the creditors who petitioned for the involuntary bankruptcy
