liquidation

(redirected from Compulsory liquidation)
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Related to Compulsory liquidation: Winding Up Order

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.

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 The Official Receiver said: 'The firm has been placed into compulsory liquidation.
Apart from this one exception, increases were right across the board: voluntary liquidations (up 1.5%), compulsory liquidations (up 14.5%), receiverships (up 5.2%) and administration orders (37.8%).
A statement released by the Official Receiver said they may examine a director of a company in compulsory liquidation in open court before a judge and under oath.
A certificate issued by the competent authority (Registers) that the tenderer is not bankrupt or filed for bankruptcy (certificate of bankruptcy register), the debt negotiation or that it is not filed debt negotiation (certificate of bankruptcy registry and chattels) or under liquidation or filed for compulsory liquidation.
It was bought by property developers Simon Toon and David Lindol for pounds 80,000, but they were unable to stop it from going into compulsory liquidation.
There has also been an increase, for the first time since the first quarter of 2002, in the number of companies going into compulsory liquidation. Compulsory liquidation is when the court makes an order for the company to be wound up on the petition of an appropriate person - the director(s) of the company or a creditor.
The firm was placed into compulsory liquidation by the High Court, Leeds, last year on the petition of HM Customs & Excise in respect of unpaid VAT tot alling pounds 4, 800.
The company was put into compulsory liquidation by Birmingham District Registry on the petition of a creditor owed more than pounds 9,000.
It was placed in compulsory liquidation by Durham County Court on September 24, 2002, on the petition of Customs and Excise over unpaid VAT.
The company was placed into compulsory liquidation in December 2001 under the application of the joint administrators, with a cash deficiency of pounds 1,314,287.
Ginavo Media was put into compulsory liquidation last November and the director, 38-year-old Nicholas Abbinante, of Chester, has now been banned from being a director for 10 years.
He also highlighted a rise in the number of creditors forcing companies into compulsory liquidation due to bad debt.

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