A Business & Banking Law Firm
For Businesses – Business Organizations and Transactions
Assignment for Benefit of Creditors
An “Assignment for Benefit of Creditors” is a unique process authorized under New Jersey law that allows a business to dissolve, sell all of its assets, use the proceeds to pay creditors, and avoid a bankruptcy proceeding. In an Assignment for Benefit of Creditors, the company chooses an “Assignee,” (usually a local attorney) to whom title to the company’s assets are assigned. The Assignee, through the use of auctioneers and brokers, arranges for the sale of the assets and then distributes the proceeds to creditors.
The method of distribution of assets in an Assignment for Benefit of Creditors is different than the distribution scheme set forth under the bankruptcy laws. In many cases, an Assignment for Benefit of Creditors is preferrable to a bankruptcy filing because of the way creditors are paid.
Maselli, Mills & Fornal, P.C. has experience acting as an Assignee, and also advising a client to proceed with an Assignment for Benefit of Creditors. This is a little used legal remedy that many lawyers are unfamiliar with, even though it can provide substantial relief in the right situation.
When your company is in financial disarray, you need an attorney familiar and experienced in all of the legal forms of relief that are available, including an Assignment for the Benefit of creditors. Maselli, Mills & Fornal, P.C. is the law firm with the experience to help.