Due Diligence for ABC Buyers: What to Look for When Buying Assets From an Estate

ABCs are a source of acquisition opportunities. Buyers who understand how to conduct due diligence on ABC assets — and how to move quickly in a competitive process — can acquire valuable assets at distressed prices.

The Due Diligence Process

When buying from an ABC estate, investigate: title to all assets, any liens or encumbrances not disclosed by the assignee, pending litigation that could affect the assets, environmental issues with real property, employee claims that might follow the buyer, and contract assignments that require third-party consent.

Speed matters more than perfection in ABC acquisitions. Assignees need to liquidate quickly to minimize carrying costs. Buyers who can close in 30 days with minimal conditions are preferred over buyers who need 90 days and extensive representations. Conducting due diligence in parallel with negotiation gives buyers the best chance of winning the deal.

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.