Assignments for benefit of creditors (“ABC”) are rarely used in these United States. That’s for two reasons: (i) some states have no ABC statute and do not recognize the common law of ABCs, and (ii) other states have onerous ABC statutes that no one wants to use.

The State of Illinois is an exception: ABCs are regularly and frequently used there, under the common law of trusts, because the ABC process is an efficient and effective tool for liquidating a failed or failing business. There is no ABC statute in Illinois.

Introduction
Meetings of creditors and shareholders
Reporting delinquent officers
Declaration of solvency
Disclaiming onerous property
Comment

Domestic Procedures

Every now and then we get a bankruptcy opinion declaring a rule with broad application that, (i) may make sense is specific situations, but (ii) is a terrible result for others.

Here’s an Exhibit A opinion for such a proposition: Reinhart Foodservice LLC v. Schlundt, Case No. 21-cv-1027 in the U.S. District Court for Eastern Wisconsin, (Doc. 12, issued October 27, 2022).

The Facts

Poor Chicago. 

Unlike the result for Chicago’s traffic ticket income in Fulton v. Chicago, the U.S. Supreme Court refuses to rescue Chicago in City of Chicago v. Mance (Case No. 22-268; Cert. denied, 11/21/2022).[Fn. 1]

Introduction
Facts
Background
Decision
Comment

Introduction

Four decades and several years ago, Congress repeals the Federal Bankruptcy Act of 1898 and replaces it with the Bankruptcy Reform Act of 1978, aka the “Bankruptcy Code.”[Fn. 1]

A decade later, Justices on the U.S. Supreme Court are still disparaging the new Bankruptcy Code as the “sweeping changes Congress instituted in 1978” and “the radical reforms of 1978.”[Fn. 2]

The Irish Minister for Enterprise, Trade and Employment signed into law the European Union (Preventive Restructuring) Regulations 2022 on 29 July 2022. This is the first significant piece of legislation dealing with corporate rescue in Ireland since 1990, when the jurisdiction's examinership process was first codified.

On 11 November 2022, the Grand Court of the Cayman Islands heard the first petition to appoint restructuring officers under the new Cayman Islands restructuring regime that came into force on 31 August 2022.

In times of financial uncertainties, and the subsequent distress that may follow, companies may have to look for ways to soften the financial burden they bear during this particular period.

The following options (a non-exhaustive list of "out of court" options) are usually put on the table: