the benefit of creditors
A quicker, cheaper alternative to bankruptcy for companies at the end of their cash runway.
G2 has considerable experience serving as the Assignee (i.e., trustee) in assignments for the benefit of creditors. An “ABC” is an alternative to bankruptcy popular with emerging growth and later stage companies alike. In many states, the process happens entirely out of court, making it a much faster and less expensive option than bankruptcy.
Every situation is different. G2 can dialogue with you on several key questions, including:
- Is an ABC a better solution for your situation than a managed wind-down, bankruptcy filing, foreclosure, or installing a CRO or turnaround advisor?
- If an ABC, should the company continue operating or cease doing business?
- What does an ABC cost?
Ranging from venture-backed, high-growth software companies to established brick-and-mortar businesses, G2 leverages its unparalleled sell-side M&A capability and deep industry knowledge to maximize recovery for creditors.
Click to Download ABC Overview
Here’s how it works:
The distressed company transfers ownership of its assets to a third-party fiduciary—the "Assignee"—who then sells the assets (often on a turnkey basis—with business operations intact) in an accelerated timeframe, returns proceeds to creditors, and handles the corporate wind-down. The board and officers walk away day one—G2’s Assignee team can "take it from here."
- G2 assesses company’s cash position, business prospects, and available solutions
- If board opts for an ABC, G2 develops a plan with timeline and budget
- Board and shareholders consent to the ABC, and lender consents to sale of assets
ABC Day 1:
- Company and G2 (as Assignee) execute general assignment agreement
- Board and officers resign
- Assignee assumes responsibility for handling all remaining matters
- Assignee hires back key employees to assist with asset sale and wind-down tasks
Beyond Day 1, Assignee . . .
- Runs IP and physical asset sale processes
- Liquidates furniture, vacates office
- Collects on customer A/R
- Communicates with creditors and gathers proof of claim submissions
- Deals with wide range of issues that may arise (e.g., hazmat, litigation, record storage, foreign subsidiary)
- Handles administrative wind-down (i.e., 401(k) plan closure, tax return filings, jurisdiction withdrawal)
After 6 Month Mark:
- Assignee analyzes creditor claims and distributes remaining funds
*Includes G2 team members’ prior experience.