The news on the gaming company, OnLive, has sprung. OnLive, Inc. is no more, having cut the bulk of its workforce loose and used an Assignment for the Benefit of Creditors (ABC) to absolve itself of massive debts incurred by the expansion of its services without a corresponding increase in its customer base.
This alternative to filing for bankruptcy, ABC, is a preferred method for debtor companies backed by venture capital to satisfy creditors, because it allows such firms to preserve their assets while staying viable long enough to find a buyer for those assets. OnLive has already assigned its assets, and the assignee has already sold them. The Venture Capitalist buyer plans to remake OnLive’s assets (including the retained employees) into a lean, profitable new start-up. The whole ABC process takes about seven months to completely wind up its business, and the remains of OnLive will be no more.