Composition with Creditors -- Transfer of Property to Trustee for Benefit of Creditors

• Category: Contracts - Composition with Creditors
• State: Multi-State
• Control #: US-0942BG
• Format: Word; Rich Text

Description

A composition agreement is an agreement made between an embarrassed or insolvent debtor and two or more of his creditors that each of the creditors entering into the agreement will be paid a specified amount, less than the whole of their claims, and the creditors agree to accept such payment in full satisfaction of their claims. The agreement works substantially an accord for which the consideration is the satisfaction to be made by the debtor, and such an accord is no bar to suit on the original debt, unless the satisfaction is performed. Composition with Creditors -- Transfer of Property to Trustee for Benefit of Creditors is a process in which an insolvent debtor transfers all of its assets to a trustee, who is an independent third party. The trustee then liquidates the assets and distributes the proceeds to the debtor's creditors according to a prearranged agreement. This type of arrangement is typically used when a debtor cannot pay its debts in full, and allows creditors to get something rather than nothing. There are two types of Composition with Creditors -- Transfer of Property to Trustee for Benefit of Creditors: a voluntary arrangement and an involuntary arrangement. A voluntary arrangement is one where the debtor and creditors agree to the terms of the transfer of property to the trustee and the distribution of the proceeds. An involuntary arrangement is one where the creditors force the transfer of property to the trustee and the distribution of the proceeds, without the debtor's consent.

Composition with Creditors -- Transfer of Property to Trustee for Benefit of Creditors is a process in which an insolvent debtor transfers all of its assets to a trustee, who is an independent third party. The trustee then liquidates the assets and distributes the proceeds to the debtor's creditors according to a prearranged agreement. This type of arrangement is typically used when a debtor cannot pay its debts in full, and allows creditors to get something rather than nothing. There are two types of Composition with Creditors -- Transfer of Property to Trustee for Benefit of Creditors: a voluntary arrangement and an involuntary arrangement. A voluntary arrangement is one where the debtor and creditors agree to the terms of the transfer of property to the trustee and the distribution of the proceeds. An involuntary arrangement is one where the creditors force the transfer of property to the trustee and the distribution of the proceeds, without the debtor's consent.