liquidation

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Liquidation

The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts.

A type of proceeding pursuant to federal Bankruptcy law by which certain property of a debtor is taken into custody by a trustee to be sold, the proceeds to be distributed to the debtor's creditors in satisfaction of their claims.

The settlement of the financial affairs of a business or individual through the sale of all assets and the distribution of the proceeds to creditors, heirs, or other parties with a legal claim.

The liquidation of a corporation is not the same as its dissolution (the termination of its existence as a legal entity). Depending upon statute, liquidation can precede or follow dissolution.

When a corporation undergoes liquidation, the money received by stockholders in lieu of their stock is usually treated as a sale or exchange of the stock resulting in its treatment as a capital gain or loss for Income Tax purposes.

See: aberemurder, assassination, cancellation, composition, discharge, dispatch, dissolution, homicide, killing, murder, payment, termination

liquidation

the procedure under which a company is dissolved (or wound up). Liquidation maybe voluntary (where the company is solvent but where the purposes for which it was set up have been achieved or no longer exist) or compulsory (usually where the company is insolvent). The function of a liquidator is to convert the assets of the company into cash, which is then distributed among the creditors to pay off (so far as possible) the debts of the company. Any surplus is then distributed among the members.

LIQUIDATION. A fixed and determinate valuation of things which before were uncertain.

References in periodicals archive ?
A spokesman for insolvency specialists Baker Tilly said: "As a result of financial issues, the directors of Padarn Bus have instructed Baker Tilly to assist them with a view to placing the company into creditors' voluntary liquidation.
The company will be placed into creditors' voluntary liquidation on the filing of documents at Companies House.
They are recommending either creditors' voluntary liquidation or, if unsecured creditors - including Customs and Excise who are owed pounds 250,000, can not be satisfied - deregistration for the company.
Ouseburn Watersports Association has gone into creditors' voluntary liquidation with debts of between pounds 70,000 and pounds 100,000.
Harrison Logistics, part of the former T&J Harrison line, is to go into creditors' voluntary liquidation.
But bad weather kept the crowds away and problems with sponsorship meant that just months later the company went into creditors' voluntary liquidation.
The decision of Eric France Metal Recycling, who trade under JKL (Wakefield) Ltd, to enter into a creditors' voluntary liquidation has also hit Championship club Dewsbury.
The Post can reveal that DBT Bars, recent owners of the Newhall Street venue, were placed into creditors' voluntary liquidation last month.
It was, therefore, decided that the most appropriate course of action was to commence the procedure to put the company into creditors' voluntary liquidation.
The results also show that one wing of the business, Future Datacom, was put into creditors' voluntary liquidation last month.
A year earlier, a hotel business known as Aquamarine - another Goldberg company - was put into creditors' voluntary liquidation owing creditors pounds 1.