Chapter 11 bankruptcy reorganization has and remains a viable option for companies in distress. The Bankruptcy Court provides a singular judicial forum where all creditors are required to participate. The Bankruptcy Court also has enormous powers and its procedures are well-oiled and generally predictable.
However, and particularly with respect to smaller companies, bankruptcies have become relatively expensive, making the process inefficient and costly for such debtors. For these “smaller” companies, therefore, other non-bankruptcy alternatives should be considered. One alternative solution to a Chapter 11 reorganization is known as an Assignment for the Benefit of Creditors, commonly referred to as an “ABC”.