Gary H. Baker, P.A.

 Attorney and Counselor at Law

 

 

 

 Over 35 Years of Experience Representing Public and Private Companies

Assignment for the Benefit of Creditors

For Insolvent Businesses

Most of us think of bankruptcy as the only way to end or liquidate an insolvent business, and for many companies this may still be the best choice.  However, there may be another option.

In the State of Florida, we have an Assignment for the Benefit of Creditors statute. This statute, provides a vehicle for liquidating your business under State Court supervision rather than through the Federal Bankruptcy Court.  There are often several advantages to this, including the substantially lower cost.

During these difficult economic times, many of our clients, including developers and builders, are using this tool as a way to liquidate their flow-through entities that are insolvent.  Besides the lower costs, perhaps one of the most overlooked advantages to an Assignment for the Benefit of Creditors is that you control the timing.  This can be crucial.  Through an Assignment for the Benefit of Creditors you can recognize the loss on the date you execute the assignment - substantially earlier than you would be able to recognize the loss through a bankruptcy, foreclosure or sale.  For more information on accelerating your losses please see this excellent article by Thomas Wells and Joseph Schortz:
    
            Accelerating Losses with an Assignment for the Benefit of Creditors, Florida Bar Journal, November 2008 
            http://www.twellslaw.com/wp-content/uploads/2008/12/accelerating-losses-nov-2008.pdf  

We find that clients have many reasons for choosing an Assignment for the Benefit of Creditors over a Bankruptcy filing.  Some are trying to avoid the the cost of a Chapter 7 filing or are trying to accelerate the timing, others simply want to avoid the stigma of a bankruptcy.  Whatever your concerns, you should look into Assignment for the Benefit of creditors and see if it is a viable option for your insolvent entity.

This is not a widely known area of the law, and you need someone with experience.  Mr. Baker has served as Assignee for many insolvent businesses, and is extremely well versed in both Bankruptcy and Assignment for the Benefit of Creditors Law.  Before you take the next step, explore your options.  Call us to schedule a consultation.
 

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Gary H. Baker, P.A.

2470 Sunset Point Road

Clearwater, Florida 33765

(727) 793-0066 phone

(727) 793-0642 fax 
  


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