Pending Lawsuits and the ABC: What Happens to the Cases

The company is a plaintiff in two cases and a defendant in three when it assigns. Each case follows its own path — and none of them simply disappears.

What the Law Says

Claims the company holds transfer to the assignee as estate assets, to prosecute, sell, or settle; claims against the company continue — no automatic stay exists — but plaintiffs face a defendant whose assets have left, converting their suits into ABC claims as a practical matter. Insurance-covered claims proceed against the policies.

How to Navigate It, Step by Step

1. Schedule every case both directions in the assignment package.
2. Plaintiff-side: brief the assignee on value and posture — litigation assets sell and settle like any other.
3. Defendant-side: tender insured claims to carriers; coverage survives the assignment.
4. Notify courts and counsel appropriately as representation and party status evolve.
5. Expect claimants in the estate: yesterday’s opposing parties become today’s proof-of-claim filers.

Common Questions

We are mid-trial as plaintiffs in a solid contract case. Does the ABC kill it?

No — the claim is an asset; assignees substitute in, fund or sell the prosecution, and creditors benefit from the recovery.

A customer’s injury suit against us is pending with coverage. What changes?

Little — the carrier defends and pays within limits as before; the uninsured excess, if any, becomes an estate claim like the rest.