A faster, more cost-effective alternative to bankruptcy.
An Assignment for the Benefit of Creditors (ABC) is a state-law remedy that allows a financially distressed company to transfer its assets to a neutral assignee, who liquidates them in an orderly manner and distributes proceeds to creditors — all outside the federal bankruptcy system. Lighthouse serves as assignee, managing the process from asset custody through final distribution.
How an ABC works.
1. Asset Transfer & Custody: The company executes an assignment transferring its assets to Lighthouse as assignee. We immediately take custody and begin securing and inventorying all property.
2. Creditor Notification: We notify all known creditors, establish a claims process, and manage communications throughout the proceeding.
3. Asset Monetization: We market and sell assets through private sales, auctions, or structured processes designed to maximize recovery, the same discipline we bring to any wind-down engagement.This process may include the sale of some or all operations as a going concern.
4. Claims Administration: We review, validate, and prioritize creditor claims in accordance with applicable law and the terms of the assignment.Implement immediate cost reductions, cash-preservation measures, and lender communication protocols.
5. Distribution & Closing: We distribute proceeds to creditors in order of priority, prepare final accountings, and close the estate.
The best outcomes start with early action.
The sooner we're at the table, the more options remain available. Reach out for a confidential conversation with our team
How ABCs compare to bankruptcy and when they make sense.
An ABC is a state-law proceeding, not a federal one. It’s typically faster, less expensive, and more flexible than Chapter 7 or Chapter 11. The result is more efficient court supervision, and no requirement for a bankruptcy trustee.
An ABC is often the best fit when the business is no longer viable as a going concern, major creditors are cooperative or at least not adversarial, speed and cost matter, and the goal is to maximize recovery without the complexity of federal bankruptcy proceedings.
As assignee, Lighthouse takes legal custody of the company’s assets and assumes responsibility for the entire monetization process — from securing property and marketing assets to administering claims and distributing proceeds. We act as a fiduciary to the creditor body and provide full transparency throughout.
Timelines vary based on asset complexity, but most ABCs are completed in 3–9 months — significantly faster than a typical bankruptcy proceeding. Simple single-location assignments can close in weeks.
Yes. In some cases, we’re able to sell all or part of the business as a going concern through the ABC process, preserving jobs and customer relationships while maximizing value for creditors.
