Practice Area
An efficient, cost-effective alternative to bankruptcy for insolvent businesses seeking an orderly wind-down.
Overview
An Assignment for the Benefit of Creditors (ABC) is a state-law insolvency proceeding that provides an efficient alternative to federal bankruptcy for insolvent businesses. It involves the transfer of a company's assets to a third-party assignee — like CMBG Advisors — who then liquidates those assets and distributes the proceeds to creditors.
Unlike Chapter 7 bankruptcy, an ABC proceeding is typically faster, less expensive, and offers greater flexibility in how assets are marketed and sold. The process allows owners and management to focus on daily operations and employee transitions while the assignee handles the complexities of closure.
CMBG Advisors brings deep expertise in ABCs, having successfully served as assignees for numerous companies across diverse industries — from technology startups to manufacturing firms, retail operations, and professional services businesses.
Read the Guide: What is an Assignment for the Benefit of Creditors?Advantages
Faster resolution than traditional bankruptcy proceedings
Lower administrative costs and legal fees
Greater flexibility in asset disposition
Confidentiality throughout the process
Management can focus on daily operations
Maximized recovery for creditors and stakeholders
Why Timing Matters
ABC engagements tend to work best when stakeholders move before liquidity is completely exhausted. These are the business pressures that make early, structured action materially more valuable than waiting for a forced collapse.
26,941
US business bankruptcy filings in the year to June 2026
16.9%
year-over-year rise in business filings over the same period
608,511
total US bankruptcy filings in the year to June 2026
The Process
We conduct a thorough evaluation of the company's financial position, assets, liabilities, and stakeholder interests to determine if an ABC is the optimal path forward.
The company's assets are formally transferred to CMBG as the assignee through a carefully structured assignment agreement, ensuring legal compliance and stakeholder protection.
Our team immediately secures and catalogs all company assets — physical inventory, intellectual property, accounts receivable, and real property — to prevent deterioration or loss.
We notify all known creditors, establish a claims process, and maintain transparent communication throughout the proceeding to ensure equitable treatment.
Through a combination of private sales, auctions, and negotiated transactions, we maximize the value recovered from company assets while maintaining market discretion.
Proceeds are distributed to creditors according to established priority, with detailed accounting and final reporting to all stakeholders.
Who We Serve
ABCs are particularly well-suited for companies that have exhausted other alternatives and need to wind down operations in an orderly fashion. This includes venture-backed startups that have run out of runway, small to mid-size businesses facing insurmountable debt, and companies with valuable assets that can be liquidated to maximize creditor recovery.
Lenders, investors, and boards of directors often prefer ABCs because they provide a structured, transparent process without the stigma and cost of federal bankruptcy court. The proceeding can typically be completed in a fraction of the time, allowing stakeholders to move forward more quickly.
If you're facing financial distress and considering your options, CMBG can provide a confidential assessment to determine whether an ABC is the right strategy for your company.
Related Resources
These related articles, guides, videos, and case studies show how CMBG approaches ABC-driven wind-downs, asset sales, and stakeholder coordination when time and liquidity are constrained.
FAQ
These are the questions we hear most often from boards, lenders, investors, and management teams evaluating whether an ABC is the right wind-down strategy.
Contact us for a confidential assessment of whether an ABC is the right path for your company.
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