California ABC Blog
Assignment for Benefit of Creditors. Business Dissolution. Creditor Rights. California Law.
-
ABC and the SBA: Navigating Federal Loan Programs in a Wind-Down
SBA-backed loans present unique challenges in ABC administration because of the federal government’s involvement. Understanding the SBA’s role helps both assignors and assignees navigate the process efficiently. SBA Lender Coordination The SBA lender must be notified promptly after the assignment. The lender will typically request a comprehensive asset list, appraisals of collateral, and a proposed…
-
The ABC and Cryptocurrency: Emerging Issues in Digital Asset Administration
As more businesses hold cryptocurrency as a business asset, ABCs are encountering digital currency for the first time. The issues are novel, the legal framework is unsettled, and the practical challenges are significant. Cryptocurrency in ABC Estates Cryptocurrency held by a business is an asset of the estate — the assignee must obtain control of…
-
ABC Notice Requirements: Publication and Personal Notice
California law has specific requirements for recording and publishing notice of an ABC. These requirements exist to protect creditors who may not be in direct contact with the business and to establish the official record of the assignment date. Recording and Publication The Assignment Deed must be recorded with the county recorder in the county…
-
Lessons From Failed ABCs: What Goes Wrong
Not every ABC goes smoothly. Understanding the common failure modes helps business owners and assignees avoid the mistakes that turn a manageable wind-down into a costly, contentious process. Common Failure Modes The most common ABC problems: choosing an inexperienced or conflicted assignee, making preferential payments to favored creditors in the weeks before the assignment, failing…
-
ABC and Pending Insurance Claims: An Overlooked Asset
When a business makes an assignment, any pending insurance claims — property damage, business interruption, liability — become assets of the estate. The assignee must identify and pursue these claims as diligently as any other asset. Insurance Claims as Estate Assets Business insurance claims in progress at the time of assignment include: property damage claims…
-
The ABC and Cross-Border Assets: Property Outside California
California’s ABC statute governs assets located in California. When a business has assets in other states — inventory in a Texas warehouse, a bank account in New York, equipment in Nevada — the assignee must navigate a patchwork of state laws to collect those assets. Handling Out-of-State Assets The California Assignment Deed does not automatically…
-
The ABC for Medical Practices: Patient Records and HIPAA Obligations
Medical practice ABCs involve a layer of regulatory complexity that general commercial ABCs don’t. Patient records, professional licensing requirements, and HIPAA obligations all affect how the assignee must administer the estate. Healthcare-Specific Issues The assignee must: arrange for compliant storage and access to patient records (typically for a minimum of seven to ten years), notify…
-
Retail ABC Special: Store Closing Sales and Inventory Recovery
Retail business ABCs are among the most visible — and the most regulated. Store closing sales in California require permits, comply with pricing restrictions, and must be conducted within specific timeframes. Retail-Specific Issues Retail ABCs must address: store closing sales (permits are required, and pricing practices are restricted under California Business and Professions Code), gift…
-
The ABC and Construction Companies: Contractor License Bonds and Mechanic’s Liens
Construction company ABCs involve mechanic’s liens on properties where work was performed, contractor license bonds that may respond to unpaid subcontractors, and complex multi-party relationships among owners, general contractors, and subs. Construction-Specific Issues The assignee must: identify all projects where mechanic’s lien rights may exist or have been asserted, evaluate the bond coverage available, coordinate…
-
ABC Restaurant Special: Food, Liquor Licenses, and Kitchen Equipment
Restaurant ABCs are among the most common in California, and they have characteristics that experienced assignees have seen many times: liquor licenses with real transferable value, kitchen equipment with active used markets, and lease situations that drive the entire timeline. Restaurant-Specific Issues The liquor license is often the most valuable asset in a restaurant ABC.…
California ABC System — Assignment for Benefit of Creditors 