Assignment for Benefit of Creditors Flashcards
1
Q
How may a debtor liquidate assets by statute?
A
Transfer all of their property to third party, who then sells the property for the benefit of creditors
* Assignee takes complete title of assets transferred and owes a fiduciary duty to debtor’s creditors
* Assignment must be recorded to be effective
2
Q
What may a creditor do with respect to the assignment?
A
May renounce the assignment and proceed at law against assignor’s after-acquired property/surplus
3
Q
What happens if the creditor continues to use the property after beginning to “liquidate assets?”
A
The transfer can be ttacked as a fraudulent conveyance
