Unlike a Chapter 7 Corporate Bankruptcy, assets may be liquidated by a variety of means and methods. Often, the method and timing of the liquidation can be arranged in advance of making the ABC so that continuity of a business enterprise or the value of depreciating assets can be maximized. In a Chapter 7 Bankruptcy, continued operation of the business, once a corporate bankruptcy is commenced, is allowed only upon obtaining a court order. It is costly and time-consuming to obtain court authority to continue the operation of the business for the purpose of maximizing its ultimate liquidation value. In fact, obtaining authority to operate a business is difficult because a Chapter 7 Bankruptcy Trustee is under a statutory duty to avoid entrepreneurial activities with assets under the Bankruptcy Court’s jurisdiction.

On the other hand, an ABC allows for a variety of prompt liquidation methods, including a sale of the assets as a going concern, sale of assets in place, as a turnkey operation, and/or by piecemeal liquidation of assets in groups or individually. Moreover, because of the flexibility offered by an ABC, existing ownership of the transferring entity can participate in the acquisition of assets and thereby effect a “reorganization” without all of the attendant risks, uncertainties and expenses of a Chapter 11 Corporate Bankruptcy.