Junior creditors frequently receive more under an ABC than they would under a bankruptcy. The reason is that any creditor can preempt an ABC filing by petitioni

Junior creditors frequently receive more under an ABC than they would under a bankruptcy. The reason is that any creditor can preempt an ABC filing by petitioning for an involuntary bankruptcy in federal court. To avoid an involuntary bankruptcy, the senior creditors are usually willing to let the trustee make compromises when settling with junior creditors.