When the assignee is ready to make distributions, the calculation follows a specific sequence that reflects the priority waterfall. Understanding the math helps creditors calibrate their expectations.
The Distribution Calculation
Start with total net proceeds from asset sales. Subtract administration expenses. The remainder flows to the priority waterfall: secured creditors first (from their collateral proceeds), then priority unsecured claims (wages, employee benefits), then general unsecured claims pro rata. Each general unsecured creditor’s share equals their allowed claim divided by total allowed unsecured claims, multiplied by the available amount.
Pro-rata means everyone gets the same percentage. If $100,000 is available for $1,000,000 in total allowed unsecured claims, every unsecured creditor receives 10 cents on the dollar — regardless of the size of their individual claim. The assignee calculates this simultaneously for all allowed claims and issues checks accordingly.
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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