The Court of Chancery for the State of Delaware recently issued a ruling affirming the ability of assignees in assignments for the benefit of creditors (ABCs) to assert claims against third parties originally held by the assignor. The Chancery Court’s decision adds further case law articulating the rights and powers of assignees in an ABC proceeding. Through this decision, assignees have further comfort that all of the debtor’s property vests in the assignee, with the ability of the assignee to assert any claims and causes of action the debtor could assert prior to the ABC assignment, including the enforcement of an arbitration clause.

Originally published in the ABI Journal, Vol. XXXV, No. 1 - January 2016.