Assignments for Benefit of Creditors
A business in financial difficulty doesn’t necessarily have to file for bankruptcy. In many instances, an assignment for the benefit of creditors can provide closure for a business and many flexible options for sale of a business, either in liquidation or as a going concern. This time-honored approach to resolve overwhelming business debt has been utilized in Illinois for more than a hundred years. It allows for the transfer of all of the assets of a corporation or limited liability company to an independent third-party assignee. In turn, the assignee will sell or liquidate all of the assets and pursue all causes of action to which the business was entitled. As long as the assets are properly exposed to the market, and sold for a fair price, even the former owner of the corporation may be associated with the buyer. Of course, proper planning and fair dealings are necessary in order to avoid the risks of successor liability. Lakelaw works with major assignees for the benefit of creditors and has successfully represented many businesses that have used the assignment vehicle to avoid bankruptcy and to satisfactorily resolve their business affairs. Recently, David Leibowitz was called upon by Dow Jones Daily Bankruptcy News to give a complete explanation as to the utilization of Assignments for the Benefit of Creditors and related statutory proceedings such as Chapter 128 of the Wisconsin Statutes
