Using the ABC to Preserve Business Relationships During Insolvency

One of the least-discussed advantages of the ABC over bankruptcy is the effect on business relationships. Suppliers, customers, and partners often react differently to an ABC than to a bankruptcy filing — and that difference affects what can be achieved in the wind-down.

Why Relationships Matter

An ABC — which is private, professionally administered, and focused on maximizing recoveries — often keeps key relationships intact during the wind-down. Suppliers who are treated professionally and kept informed are more likely to cooperate with the assignee than ones who find out about the insolvency from a bankruptcy court notice.

Goodwill has liquidation value. A business with strong supplier and customer relationships can sometimes be sold as a going concern even in distress — precisely because those relationships are intact. An ABC that preserves relationships while the assignee finds a buyer often produces a going-concern sale where bankruptcy would have produced a liquidation.

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.