When a business makes an assignment, it typically has a portfolio of contracts — with suppliers, customers, service providers, and landlords. The assignee must evaluate each contract to determine whether it has value, whether it should be assumed and assigned to a buyer, or whether it should be rejected.
Contract Analysis
Contracts that have value — recurring revenue agreements, long-term supply contracts at favorable prices, customer subscriptions — can be assigned to a buyer as part of a going-concern sale. Contracts that are burdensome — above-market leases, unfavorable service agreements — can simply be rejected. The counterparty becomes an unsecured creditor for any damages from the rejection.
Contract assignment requires counterparty consent in most cases. Unlike Chapter 11, which can assign contracts without consent in certain circumstances, an ABC assignee generally needs the counterparty’s agreement to transfer a contract. Experienced assignees navigate this by moving quickly before key contracts expire or customers defect.
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. Request your free evaluation here.
California ABC System — Assignment for Benefit of Creditors 
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