❖ What’s the difference between an ABC and bankruptcy?

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An Assignment for the Benefit of Creditors (ABC) is a state-based, out-of-court liquidation process that is typically faster, less expensive, and more flexible than federal bankruptcy. It avoids the complexity of court filings and often allows for greater control and discretion in the wind-down process.

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❖ How long does a receivership typically take?

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The length of a receivership varies based on the size and complexity of the business, but most receiverships handled by CMBG Advisors are completed within 3 to 9 months. We focus on efficiency, compliance, and preserving value.

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❖ What happens to unsecured creditors?

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Unsecured creditors are typically paid after secured creditors and administrative costs, but they still play a vital role in the process. In many of our ABCs and receiverships, we’re able to negotiate favorable outcomes for unsecured creditors through structured settlements or partial distributions.

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❖ Can I retain control of my business during restructuring?

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In many out-of-court restructurings, existing management can retain operational control under the supervision of a restructuring advisor. In a receivership or ABC, control shifts to a fiduciary, but we work closely with management to ensure business continuity and informed decision-making.

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❖ When should I consider hiring a receiver or assigning my company’s assets?

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If your business is insolvent, facing creditor litigation, or no longer able to operate profitably, appointing a receiver or initiating an ABC can be a strategic move. It allows for orderly resolution, protection from legal exposure, and value maximization for all parties.

 

❖ What is the difference between a receivership and a bankruptcy?

A receivership is a court or creditor appointed process where a neutral third party (the receiver) takes control of a company’s assets or operations, often to preserve value, stabilize operations, or liquidate assets. Bankruptcy, by contrast, is a federal court process governed by the Bankruptcy Code and involves automatic stays, discharge of debts, and formal creditor committees. Receiverships can be faster, less expensive, and more flexible.

 

❖ When should a business consider an Assignment for the Benefit of Creditors (ABC)?

An ABC is ideal when a company is insolvent but wants to avoid the complexity, cost, and public nature of bankruptcy. It is especially suitable when directors want to wind down responsibly, preserve value, and protect their fiduciary obligations.

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❖ What is the benefit of using CMBG as an assignee or receiver?

CMBG brings decades of legal and operational experience to fiduciary roles. We focus on preserving asset value, maximizing creditor recovery, and minimizing reputational harm. Our team understands both the legal framework and the human complexity of financial distress.

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❖ What types of creditors benefit most from Article 9 sales?

Secured lenders seeking fast, non-judicial enforcement of collateral rights often benefit from Article 9 sales. These sales avoid litigation, reduce costs, and allow for efficient liquidation or transition of assets. CMBG helps ensure compliance with UCC requirements while optimizing recovery.

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❖ Can CMBG handle cross-border or multi-state matters?
Yes. We regularly act in federal and state courts across jurisdictions and coordinate with legal counsel and advisors nationally. We are experienced in managing assets, entities, and creditor groups across multiple states and occasionally internationally.

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❖ What is the typical timeline for a liquidation or receivership process?

Timelines vary by complexity, asset type, and jurisdiction. A straightforward ABC may close in 60–90 days; a receivership may take 3–9 months depending on operational issues. CMBG emphasizes clear timelines and efficient execution from the outset.

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❖ Do you represent debtors or creditors?

We are typically engaged as a neutral third party—either by the court, secured creditors, or company management—to act in a fiduciary role. While we do not represent any party in the legal sense, we work to balance interests and comply with our duties under law.

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❖ How confidential is the process?

ABCs and out-of-court restructurings offer far more discretion than bankruptcy. While certain legal filings are public, CMBG takes great care to manage communications with stakeholders, vendors, and the public to preserve dignity and minimize reputational damage.