The Assignment Deed: What It Is and What It Must Include

The Assignment Deed is the foundational document of a California ABC. It is the instrument by which the business owner (the assignor) transfers all assets to the assignee. California law has specific requirements for what it must contain, and defects in the deed can create problems throughout the process.

Required Elements

Under California law, a valid Assignment Deed must: identify the assignor, identify the assignee, describe the assets being assigned (typically ‘all assets’), state that the assignment is for the benefit of creditors, and be executed with the formalities required for a deed. The deed is recorded with the county recorder and establishes the date of the assignment — which determines which transactions can be challenged as preferential.

The recording date is the legal date of the assignment. Everything that happened before recording is potentially subject to preference analysis. Payments made to creditors within 90 days before the assignment may be recoverable by the assignee for the benefit of all creditors. Business owners who are contemplating an ABC should understand this timeline before making any unusual payments.

The California ABC System gives business owners and creditors the exact tools, templates, and step-by-step guidance to navigate an Assignment for Benefit of Creditors — faster and cheaper than bankruptcy, without a federal court filing. Request your free evaluation here.